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Redundancy.

Redundancy.

The issue of redundancy is often misunderstood, and it is easy for employers to forget that an employee can only be made redundant if a position is no longer required and all other redeployment options have been attempted.

When an employee is advised they are to be made redundant, following no success from the redeployment process, employers are required to offer all of the support mentioned in the employment agreement or policies as a minimum. Employers should ensure all the redeployment options have been evaluated with the employee, rechecking this with the employee is also a good practice.

The date of when the job is no longer required is also important as it raises some questions when considering the validity of any redundancy. For example, the employee may be able to stay on for a while longer while further redeployment opportunities are explored. Where the redundancy is final, counselling support should be considered.

Additional support should also be assessed, such as assistance with resume development, skills in job interviews, general career advice, or any additional training which can improve job prospects for the employee. This support and any further steps in the redundancy process should be discussed with your employee.

Notice of redundancy.

In the absence of a notice period being outlined in the employment agreement, the requirement is for ‘reasonable notice’ to be given. Reasonable notice depends upon a number of factors:

• the reason for redundancy
• the length of service provided by the employee
• the remuneration package or seniority of the employee in question
• other customs or practice followed in the industry
• the job prospects of the employee
• compensation amount being paid

The official notice of redundancy must be provided to employees in writing. When determining the notice period, the length must be what is outlined in the employment agreement or any relevant policies. An employee may agree to you giving longer notice, which can help the employee plan for the coming termination or could even lead to further redeployment opportunities being explored. However, there is no requirement for an employee to agree to a later date.

Final payments.

Similar to when employment is ended by termination, redundancy does not remove the obligation of any entitlements, such as unused annual leave and salary which may be owed to the employee. The amount of this payout will depend on the final day of service. Employers should be aware that annual leave accrues right up until the final day of service, as do all the other entitlements owed to the employee being made redundant.

The entitlement of any employee to a redundancy payment largely depends on the employment agreement and will often form part of a negotiation between employers and employees. Whether or not an employee is entitled to a redundancy payment does not impact the notice period outlined in the employment agreement. In fact, employers can require a redundant employee to work the notice period.

Transitioning out of employment can be difficult and with so many factors at play in redundancies, it can be confusing. For peace of mind call our advice line day or night on 0800 675 700.

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Employsure is New Zealand's leading workplace relations specialist, working directly alongside employers to set the solid foundations for...
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