CIVIL LAW

Redundancy

Redundancy is genuine when the employee’s position ceases to exist. This generally occurs in one of the following ways:

• a decline in available work;

• restructuring, including contracting out work;

• sale or transfer of the employer’s business.

It must be remembered that a redundancy is actually a dismissal because the employment relationship is terminated by the employer, although most employment agreements deal with it separately because it is not a disciplinary action.

Once again, an employer must act fairly and reasonably in its dealings with employees and will be required to show:

• The redundancy is for genuine commercial reasons.

• The relevant provisions of the employment agreement have been observed.

• The employer has acted fairly and sensitively in the way the redundancy was carried out

PROCEDURAL FAIRNESS IN REDUNDANCY DISMISSALS 

Since the Court of Appeal's decision in GN Hale &  Son Ltd  v Wellington Caretakers etc IUW 1 [1991] I NZLR 151, it has been accepted by the Tribunal and the Court that in a redundancy, as with any other dismissal, an employer must act FAIRLY.

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