KEY POINTS:
The headlines are becoming more common: "Redundant meat workers assess options", "Auckland Museum sheds 46 staff", "Eftpos firm to slash about 100 staff".
Redundancy - few words have such an emotive effect in the working world. We all like to believe that leaving a job will happen on
our own terms but most New Zealand employees find out sooner or later that it doesn't always go like that.
Sometimes it happens because a firm is struggling and has to reduce costs - wages and salaries are often one of the bigger costs. Other times it happens because a firm is restructuring, whether that be through a takeover or merger or a change in the way it operates.
Also, a role may change in a way employees do not like but they will not be able to argue they have been made redundant.
So just what defines redundancy?
The explanation on the Department of Labour's website says redundancy occurs when "a position filled by an employee is no longer needed or the employer has made a genuine decision for commercial reasons to discontinue employment".
From a law perspective, Kensington Swan partner and employment lawyer Susan Geluk-Hornsby says redundancy occurs when "a position filled by an employee is no longer needed - the work has either dried up or the skills required by the employer have changed such that the employee's position is now superfluous to requirements".
Let's say my employment agreement has a generous redundancy clause and I don't enjoy my job much anyway. If my employer restructures and asks me to start and finish half-an-hour earlier and adds one more task to my job description, can I insist on taking the money and running?
Well, no. "The starting point is that no employee can expect their job to remain unchanged for life and all workplaces evolve and develop," says Geluk-Hornsby. The law allows "a reasonable amount of change" to any position as part of management prerogative with the commonly accepted starting point being "the 20 per cent rule".
Let's say you're a journalist. "If an employer came to you and said, 'I want to change your duties so that 20 per cent of the time you make the tea and be the receptionist', you might argue that the position has changed substantially.
"I think that's an absolute minimum but it's a starting point.
"If your role was made up of simply being a journalist and they then said, 'We want you to do something different that requires a fundamentally different skill set', the job has changed substantially."
Substantial change, says Geluk-Hornsby, does not involve tacking one more task on to your job description. "That sort of thing is more part of the evolution of the job.
"If the change is such that you don't have the skills and you require re-training, then it's likely that would be a substantial change."
Let's say I've been hired as a news reporter and my employer wants me to write features. That's substantial, isn't it?
"The question there would be: When you were hired, were you hired specifically as a news reporter or were you hired generally as a journalist?
"If you were hired specifically to be a news reporter and that's your skill and background, that is probably a fundamental change."
If, however, my employment agreement simply said I was hired as a journalist, such a change would probably come under the definition of management prerogative and there would be no redundancy.
"It comes down to how your job is described and what your job description says and whether there's sufficient flexibility in that for an employer to ask you to do something different.
"I'm an employment lawyer. If the firm said to me, 'There's not much work in employment, we want you to work in property law', the firm would argue they had hired me as a lawyer and they could redeploy me to a different area.
"It would be fair to say that the courts are reluctant to declare an employee redundant if the employer still has an ongoing need for their services."
Neither is redundancy automatic when a firm changes location and so increases employees' travelling time.
Hornsby-Geluk was involved in one case where a firm moved 15km meaning employees now had to travel on the motorway to get there.
One employee, who said she suffered from an anxiety disorder that stopped her from driving on the motorway, argued this was a substantial change to her role and she should be made redundant.
The court decided that was not a substantial change and so she was not redundant.
There have been cases where the court has ruled a 30km shift is not a substantial change, says Geluk-Hornsby, but 30km or an increase in travelling time of 30 minutes is generally the starting point for deciding redundancy.
Another just as common scenario is that an employer changes a role slightly and declares it redundant but the incumbent doesn't want to leave.
Andrew Little, secretary of the Engineering, Printing and Manufacturing Union, says it is "not uncommon" for employers to use "redundancy" as an excuse for getting rid of an employee who might not be performing or who just doesn't fit.
"Rather than go through the process of performance management, there would be some sort of restructuring and redefining of roles and responsibilities."
He gives the example of a case from the 1990s where he represented Grant O'Neill against Victoria University. This case hinged on the amount of change necessary for one role to have genuinely ceased to exist and be replaced by a new one.
The Employment Court ruled it required more than just a change in job title and one or two responsibilities.
In this case, Victoria University changed the name of a position from union manager of the student union to general manager of the student union. It also added one area of responsibility and told O'Neill, the incumbent, that he would have to apply for the new job. It then awarded the new job to another candidate and told O'Neill his employment had come to an end.
Chief Judge Goddard disagreed. "It does not seem particularly relevant that the positions may have been different if that difference could have been bridged by promotion and, if necessary, training," he wrote.
But Goddard went on to declare that the positions, when compared, were "almost identical".
"It seems to me that there is little practical difference between the two positions and such difference as there is could readily have been catered for by training."
The court ruled O'Neill had been unjustifiably dismissed and awarded him more than $50,000.
In both scenarios, one point is crucial - redundancy involves the role, not the individual performing it. If the roles are substantially the same but the employees don't like the slight changes, they cannot argue that their positions have been made redundant. It's just that they no longer want them and need to start hunting for jobs they do want.
If, on the other hand, an employer has issues with an employee but still needs the work they perform to be done, they cannot make the employee redundant and hire someone else. The role still exists and the employer has to deal with the performance issues separately.
"If the job is not changing, then the job is not redundant," says Geluk-Hornsby. "You actually have to show that there's some change to the role in terms of its content."
And that change has to be genuine and substantial or, as Victoria University found out, the "redundancy" could prove to be very expensive.
