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Redundancy in new zealand procedural fairness and remedies

We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Close Me New Zealand: The prevalence of redundancy cases serve as a timely reminder that a redundancy must be justified and carried out in a procedurally fair manner.

New Zealand Employment Dismissals

The following are recent redundancy cases that emphasise these requirements. Mcguire V Rubber Flooring NZ Limited The employee in this case began working for the family-owned business as sales and marketing consultant. The employee alleged she had been demoted from her position as manager and later dismissed on the purported grounds of redundancy which were not genuine.

She also argued that even if the restructuring was genuine, it was not carried out in good faith and was procedurally unfair.

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However, it held that the consultation process was misleading and deceptive and had not been undertaken in good faith as its decision to restructure was made some months before consulting the employee.

The Court said that a just employer, subject to the mutual obligations of confidence, trust and fair dealing, would implement the redundancy decisions in a fair and sensitive way.

  • The process depends on the circumstances;
  • Employees outside the specified industries are given a lesser form of protection;
  • If you cannot reach a satisfactory agreement about compensation you could raise a personal grievance by following the Employment Relations Authority's procedure;
  • Once you understand the philosophy behind the law, it makes compliance with your obligations easier.

The employee believed the levels of responsibilities, skills and competencies in the new role were not broadly comparable to her old role, which had been disestablished. As a result she was not willing to accept the new role and sought redundancy compensation.

Importance of procedural fairness with dismissal

Her individual employment agreement provided that no redundancy compensation was payable if she declined an offer of a "substantially similar position", which included "comparable remuneration". As the two remuneration figures were not "comparable" in terms of the individual employment agreement, the Court held that they were not substantially similar. The Court found that the employer's failure to engage the employee in discussion concerning their differing views on comparability of the new job offered to her, breached its duty of fair treatment.

Procedural Fairness The Employment Relations Act imposes a duty on parties to an employment relationship to deal with each other in good faith. This duty specifically applies when making employees redundant. Employees should be informed of the selection criteria and be given the opportunity to contest or discuss those criteria. The criteria should be objectively measurably.

Redundancy – Court of Appeal confirms test for dismissal

Where the agreement does not contain a notice period, reasonable notice must be given based on the circumstances. The Courts have held that once guidelines have been set by a company as to the way in which it will conduct a restructuring, then the company should try and ensure that it sticks to its set guidelines. A dismissal for redundancy may be unjustified if an employer does not follow its own policies, particularly when these have been followed on earlier occasions.

  1. These rules covering restructuring are explained in detail below, under the heading "Restructuring. An employee has a right to raise a personal grievance case under the Employment Relations Act 2000.
  2. Second Step Arrange a meeting with the employee.
  3. Some factors that might be relevant include.
  4. A redundancy can occur for financial reasons, where the employer is having financial difficulty and it is necessary to keep their costs down. Abandonment of employment The above reasons are the most common, but it must be stressed that it is by no means an exhaustive list.

Where an employer fails to prove a redundancy was made for genuine reasons and that it was carried out in a procedurally fair manner, then it runs the risk of the employee being awarded any or all of these remedies. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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