Covid-19: Redundancy

Employers are entitled to structure their businesses in a sustainable and profitable manner. There is no obligation at law to have positions in a business that are not necessary.

What is redundancy?

Redundancy is simply another method of terminating employment. Redundancy is generally considered to be a situation where an employee’s position is surplus to the employer’s commercial needs.

It is important to remember that it is the position that is surplus, not the employee.

If an employee is not performing then the process is performance management. If an employer is alleged to have committed misconduct or serious misconduct the process is disciplinary investigation .

In relation to a restructure that may result in positions becoming redundant there are processes that must be strictly adhered to as required by the Employment Relations Act and the good faith requirements.

Good faith

The Employment Relations Act 2000 requires employers to act in good faith when making employees redundant. It also requires an employer who is proposing to make a decision that will, or is likely to, have an adverse effect on the continuation of employment of one or more employees to provide those employees with relevant information and an opportunity to comment before the decision is made.

This means:

  • An employer considering redundancy action needs to ensure it has given the employee a copy of all information it is relying on in making the decision.
  • The employee must be given a genuine opportunity to comment on the possibility of redundancy.
  • Any feedback the employee gives regarding how the redundancy may be avoided should be carefully considered by the employer before a final decision is made.

Remember, care must be taken when declaring an employee’s position redundant. Make sure the proper process is followed and do not try to use ‘redundancy’ as a means for dismissing troublesome staff.

If you would like any advice to ensure you have your processes correct, please our Employment Team

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