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Home / New Zealand

<i>Your rights:</i> Made redundant without warning

By Rani Amaranathan of DLA Phillips Fox
25 Mar, 2007 05:00 PM3 mins to read

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KEY POINTS:

I was made redundant in September last year with no warning. The reason given was that profitability of the business had been declining - nothing to do with my performance. My job was then given to my boss, i.e. the job still exists in its entirety, they just took it off me and gave it to the boss. (This was stated in an email I have a copy of). On the employer's part it was very easy to do. What is there to protect employees from this sort of redundancy, especially now that many employment contracts have no redundancy compensation included? I had been there for three years and was in a relatively senior position.

Under current employment law, if your employment agreement says nothing about redundancy compensation or says you are not entitled to it, then you generally are not entitled to any. This means many employees who are on individual employment agreements are not entitled to any compensation if they are made redundant. But that does not mean you can be made redundant at the stroke of a pen. Employers need to have genuine commercial reasons for a redundancy and must follow a fair process to implement it. You say your boss has been given your job. If your boss has taken on all of your duties as well as continuing to do his or her own, then your redundancy may have been genuine. Employers are entitled to restructure their business to save money to become more efficient.

But your employer cannot make you redundant, and then give your job to someone else who does your old job instead of their previous one (or is a new employee). If, in effect, your boss's position was redundant but instead of dismissing your boss your employer dismissed you and gave your position to your boss, that suggests your redundancy was not genuine. Even if your redundancy was for genuine reasons, your employer was still obliged to follow a fair process. If you had no warning of your redundancy then the process was unfair.

Briefly, an employer should usually follow this process to implement a redundancy:

* Follow any process in your employment agreement for redundancies

* Before a redundancy decision is made, tell you there is a restructuring proposal.

* Meet with you to discuss the proposal and how it might affect your employment, allowing you to have representation at the meeting.

* Give you an opportunity to comment on the proposal.

* Explore redundancy alternatives.

* Tell you the criteria it will use to select who will be made redundant (e.g. length of service).

* Give you notice if it decides to make you redundant (under your employment agreement or 'reasonable notice') and redundancy compensation if your employment agreement provides for any.

* Allow you to work out your notice period (usually).

* Give you assistance, e.g. counselling, time off for job interviews, etc.

* Allow you to leave with dignity.

Failure to follow this process may mean the redundancy is an unjustified dismissal and entitle you to compensation. To get compensation you need to raise a personal grievance with your employer.

You must do this within 90 days of the action that caused the grievance (your redundancy).

Your redundancy was in September so you could only pursue a personal grievance now if the Employment Relations Authority granted you leave to do so.

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