Redundancy Advice Wellington

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Have recently been made redundant Redundancy issues often arise, especially around Christmas for some perverse reason.

The law requires that a restructuring clause be put into all employment agreements. Restructuring applies “when an employer sells, transfers or contracts out part or all of its business”. For example a cleaning company engaging a contractor to take over cleaning an existing client’s premises.

The law protects “vulnerable employees” such as catering, cleaning and caretaking staff. They are broadly entitled to be transferred to the new employer keeping their benefits like service pay. Employers with 19 or less staff may be able to can claim exemption to some of these legal requirements, so saving costs in having to pick up the transferred staff benefits.

Most employees will not be classed as “vulnerable”. If however they are caught up in a restructure the employer must consult and see if its existing employees can be transferred to the new employer. If not successful then redundancy likely arises.

What to expect when going through a redundancy or restructure.

When an employees “job becomes surplus to the requirements of the employer” then redundancy arises. It is the job that has to cease or be seriously modified, not a contrived exercise to get rid of the person currently in the job.

To illustrate, an advertising agency cannot continue to employ all its copywriters as a major account has been lost to a competitor. The Employment Relations Authority or Employment Court is unlikely to interfere with an employer’s decision to rearrange a business as it sees fit, even if it does not make the best of sense – however they are sticklers for proper consultation and agreed procedures being followed to the tee.

The law around restructuring and redundancy can be muddling and recent changes have further complicated matters. Jamieson Partners have long experience in advising individual employees, worker groups, and companies through the unpleasant task of handling a redundancy.

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