Coronavirus warning for employers over redundancies

Employers should not use this as an opportunity to get rid of dead wood warns an expert. Photo / File.

Employers should not use the coronavirus pandemic as an excuse to "get rid of dead wood", a legal expert has warned.

Edwin Morrison, a director at K3 Legal, said businesses wanting to make redundancies needed to follow the correct process.

"That means they - the employer - can't just turn up tomorrow and say you are redundant."

Morrison said a position could only be made a redundant based on genuine economic reasons.

"It can't be for past performance of the employee."

Edwin Morrison, director at K3 Legal.

Morrison said there had to be a consultation process where the staff member was told their position could be made redundant and then given a chance to provide feedback on it.

Employees can counter the proposal with their own and could make suggestions such as taking a pay cut, leave without pay or changing the role to include other work.

In situations where multiple positions were being made redundant and a new position created that new position or positions needed to be at least 30 per cent different, Morrison said.

There is no set timeframe for the consultation process and Morrison said it could be very short in some circumstances where it was clear that the businesses revenue had disappeared overnight.

But he warned employers not to take short-cuts or to be guided by previous redundancies.

"The employer needs to tread more carefully because of the potential downside to get it wrong."

"In the current environment, there is an implied duty of care."

He pointed to the Government's $12 billion package and its talks with banks to ensure they supported businesses which meant there was more pressure on businesses to keep going and support staff.

In ordinary times an employee could expect to get a job elsewhere but that could be much more difficult at the moment, he said.

Morrison said if employers were reckless then he "absolutely" would expect to see a surge in claims being taken to the Employment Relations Authority.

He said the ERA would not take kindly to any employers who used this as an opportunity to make people redundant.

"If you are found to be doing that you could find you are liable for wages."

He said he would also expect any redundancy not done properly to attract higher damages than in normal times.

"Simply because you can't get a replacement job."

Morrison said any businesses worried about having to make staff redundant should be talking to employees now.

"If you are in hospitality, tourism, if there is any risk of redundancy you should be talking to staff now."

He said many employers worried about talking to their staff and stressing them out.

But he said staff would already be mindful of the issues.

"They might prefer the certainty and it will give staff time to come up with ideas."

For those employees worried about losing their job he urged them to front foot the situation.

"Ask your employer if they are thinking about it and should you be concerned?"

He said worried workers should try to get their house in order and have savings in place.