Being made redundant often leads to feelings of uncertainty about the future, financial strain, and even emotional distress.
However, redundancy must follow specific legal processes to be deemed fair and justified. If the process is not handled correctly, it may be considered an unjustified dismissal, leaving your employer liable for compensation or legal action.
In this article, we’ll explore what constitutes a fair redundancy, signs that your redundancy might be unjustified, and the steps you can take if you believe you’ve been treated unfairly.
What is Redundancy?
Redundancy occurs when an employer decides that a particular job or role is no longer required. This might happen for several reasons, including economic downturns, restructuring, technological changes, or shifts in business strategy.
While redundancy is a legitimate reason for terminating employment, it must be handled carefully and in accordance with employment laws. An employer must demonstrate that the redundancy was genuine, and that it followed the proper legal procedures.
Signs Your Redundancy May Be Unjustified
Here are some signs that your redundancy may not be legitimate, and that you may have grounds for a grievance or legal action:
1. No Genuine Business Need for the Redundancy
A redundancy should only occur if there is a genuine business reason for the job being eliminated. If your employer cannot clearly explain why your role is no longer needed, or if they make the decision to make you redundant without a valid business reason, this could be a sign that your redundancy is unjustified. Additionally, if your employer is hiring for similar roles or continues to operate as usual while making redundancies, it may indicate that your redundancy was not genuine.
2. Failure to Follow a Proper Consultation Process
Employers are legally required to consult with the employee before making their redundancy final. This process should include:
Informing employees about potential redundancies.
Explaining the reasons for the redundancy.
Allowing the employee to discuss alternatives, such as redeployment to another position within the company.
Considering employee feedback and concerns before making a final decision.
If your employer did not engage in meaningful consultation, did not give you enough time to consider your options, or made the redundancy decision without hearing your side, it may indicate that the process was flawed.
3. Lack of a Fair Selection Process
If multiple employees face redundancy, the selection process should be based on clear and objective criteria.
For example, your employer might consider factors such as length of experience, skills, or performance. If your employer uses subjective or discriminatory criteria, or if you are selected for redundancy based on personal bias (e.g., age, gender, disability), this could be seen as unjustified.
It’s also a concern if your employer selects you for redundancy without considering your skills, or offering you other opportunities within the company. A fair selection process should also give you the opportunity to apply for alternative roles if available.
4. Discrimination or Retaliation
Redundancy cannot be used as a way for your employer to get rid of you for reasons unrelated to the business’s needs.
For example, if you have made a complaint about workplace bullying, filed a health and safety complaint, or are on maternity/parental leave, and you are then made redundant shortly after, it could be considered discriminatory or retaliatory. If you suspect your redundancy is linked to personal grievances, complaints, or any form of discrimination, you may have grounds to challenge the redundancy.
5. Inadequate Notice or Severance Pay
Employees who are made redundant are entitled to the same notice and compensation as any other form of dismissal, unless specified otherwise in their employment contract.
This includes redundancy pay (if the contract or workplace policy stipulates it), payment for any unused leave, and appropriate notice of redundancy (usually between 1 week and 4 weeks, depending on the length of service). If your employer fails to provide proper notice or severance payments, or if they try to avoid paying you what you’re owed, it could be an indication that the redundancy is unjustified.
6. Failure to Explore Alternatives to Redundancy
Your employer must consider all reasonable alternatives to redundancy before making a final decision. This could include offering redeployment to another role, reducing working hours, or allowing you to work from home. If your employer failed to explore these alternatives with you, it could insinuate a rushed decision, or one made without considering all options.
Additionally, if your employer had the opportunity to reduce employee numbers in other areas or restructure in a way that wouldn’t affect you, but chose to make you redundant anyway, this could suggest that the redundancy was unjustified.
What should you do if you Believe your Redundancy is Unjustified?
If you believe your redundancy is unfair or unjustified, here are the steps you can take:
Talk to your Employer
If you feel comfortable doing so, start by discussing your concerns directly with your employer. Ask for clarification on why your redundancy was necessary, and if the proper procedures were followed. Sometimes, misunderstandings can be resolved through open communication.
Review your Employment Contract and Rights
Check your employment contract to see what it says about redundancy, including your rights to notice and severance pay. You should also review your rights under the Employment Relations Act 2000 and the Human Rights Act 1993.
Seek Advice from Employment Relations Specialists
If you believe that your redundancy was unjustified, seek advice from an employment relations specialist. They can help you assess whether you have grounds for a personal grievance or action, and can assist you with your next steps and any proceedings.
File a Personal Grievance
If informal discussions don’t lead to a satisfactory resolution, you have the right to file a personal grievance. A personal grievance can be filed within 90 days of your redundancy (12 months for sexual harassment). This formal complaint process allows you to seek compensation, or possibly request reinstatement of your position if applicable.
Consider Mediation and/or Escalation
If you file a personal grievance, mediation is usually the first step in the resolution process. A neutral third party can help facilitate discussions between you and your employer to resolve the issue without going to court. If mediation is unsuccessful, you can escalate matters to the Employment Relations Authority (ERA), or even Employment Court.
Conclusion
Redundancy is a difficult experience for many. However, it must be carried out fairly, and according to existing employment laws. If you suspect that your redundancy is unjustified, or that the process was not handled correctly, it’s important to recognise the signs and swiftly take appropriate action. By understanding your rights, seeking external advice, and possibly filing a personal grievance, you can ensure that you receive the compensation and treatment you deserve.
Mahi Law can Help!
Our expert team will help you understand your employment rights, and pursue resolution (including compensation) through various channels, such as: Without prejudice negotiations, mediation, the Employment Relations Authority, or Employment Court if required.
We also work on a no-win, no-fee basis – if we win your case, your employer covers the costs.
Get in touch for a free consultation! You can fill out this form – or contact us at admin@mahilaw.nz, or 0800 450 032.
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