Tips For Employers Considering Redundancy

A lot of businesses within New Zealand are feeling the pressure of the economic impact of Covid-19.
Tips For Employers Considering Redundancy

A lot of businesses within New Zealand are feeling the pressure of the economic impact of Covid-19.

If your business is feeling the pressure, we have put together some top tips for an employer considering a redundancy/restructure; Each business has its own separate needs and the below are general tips.

However, if you are considering your options in respect of a redundancy/restructure we suggest you obtain legal advice.

  1. Consider your ‘why’ - for a business to undergo a genuine restructure there needs to be a genuine reason to do so. Genuine reasons can include but are not limited to:
  • Improving the business processes to increase productivity and improvements to the technology the company may use to assist
  • Product changes
  • Loss of work, including customers and suppliers and customers cancelling the contracts.
  • Financial reasons
  • Changes to the operating structure or decreases outgoings
  1. Be transparent - talk to your employees! Make sure you keep your employees in the loop throughout the process. A restructuring process can be stressful for both the employer and the employees. It is best to ensure you can provide your employees with as much information as possible. Explain the steps to your employees so they are aware of what is required of them and by what dates. If you are in doubt about what to provide your employees, you should contact your lawyer to seek advice.
  1. Take notes - an employer should ensure they take all relevant notes and have all the necessary information readily available to provide if the employee requests it.
  1. Time – ensure that you provide adequate and reasonable time for your employees to process the information you are providing them and to allow them to seek independent advice. It is better to provide more time than less.
  2. Act in good faith – a redundancy/restructure should be the last resort. The overlying obligation on the employer during the process is to act in good faith. This means that your actions should be what a fair and reasonable employer would do in the same circumstances.

Remember a redundancy/restructure has a significant impact on the lives of your employees and it should be handled the best way possible.

If you have any questions or would like some assistance in dealing with a redundancy/restructure, Georgia Watts in our employment team would be happy to help. You can contact her via georgia@gallie.co.nz

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