The global economic crisis has sparked world-wide redundancies on an almost unprecedented scale.
Unemployment is also rising in NZ, and is predicted to climb steeply this year. Redundancy is when an employee’s position ceases to exist. A situation in which an employee is dismissed and replaced by someone else is not a redundancy. Redundancies may arise from a decline in available work, the sale of a business or restructuring of a firm – perhaps including a move to contacting out work.

Employers making people redundant are obliged to act fairly and reasonably. Section 4 of the Employment Relations Act requires parties to an employment relationship to deal with each other in good faith. In the redundancy context, this means the employer must consult with the employee about the proposed redundancy, consider the employee’s situation, and discuss alternative options.
Both employer and employee can consider alternatives to redundancy. These could include combining the employee’s current job with other work, moving an employee to a part-time position and the employee looking for other part-time work with another employer, or the employee moving into a completely different role in the organisation.

If a redundancy goes ahead, the employee is only entitled to a redundancy payment if it is provided for in the employment agreement. If the employer and employee cannot resolve issues relating to a proposed redundancy, they can seek the assistance of the Employment Relations Service of the Department of Labour. This is a free, confidential service, which provides mediations in the employment sphere. There is no charge for a mediation, but the waiting time may be around six weeks. Parties may represent themselves at the mediation, or may instruct lawyers to represent them.

People made redundant may also be entitled to assistance through Work and Income. People made redundant after 8 November 2008 are entitled to help through the ReStart package, comprising ReCover, RePlace, and ReConnect.

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