By Vaughan Granier

In part four of our series of articles guiding employers on how to compliantly proceed with a restructure and redundancy, we look at redeploying employees as an essential consideration before redundancy.

At this stage of the process, it’s important to have consulted stakeholders on ways to reduce the impact of the restructuring and have consulted on the selection criteria if more than one employee is similarly affected. As the employer, responsible for the process and the decision making, you’ll need to translate the restructuring decision, in principle, into the real-world outcomes that you need. Once those outcomes are agreed on after consultation, it’s bad faith to modify them or try to apply them selectively; they need to be implemented as agreed.

As we indicated, a restructure is not necessarily going to lead to redundancy. Once we get to the stage of agreeing that a restructuring will take place, and we know how it will affect the workplace, we still have to work out how that restructuring will affect people’s employment.

The steps are the following:

An important part of an original restructuring proposal is a discussion of what options exist to avoid redundancies, and whether they can be utilised. More options may be proposed during consultation, and all need to be considered. The principle of good faith means that an employer should make the minimum changes required to achieve the desired outcome, and especially if those changes might impact employment. Terminating an employee via redundancy in a way that was demonstrably unnecessary would be an example of a bad faith restructuring process.

A restructuring decision determines which positions are affected, and how they might be affected. This leads to an understanding of who might be affected by the restructure, and by how much. Using the options generated by the consultation process, around minimising the impact of the restructure, the employer can minimise the number of positions – and then people – who might be affected.

What exactly is redeployment?

Redeployment is when you place an employee into an alternative position because their current position has become disestablished. Even where there is a valid change to your business’s operational requirements, and you have conducted a consultation process, a redundancy would not be considered genuine if there’s a reasonable opportunity for the employee to be redeployed within your enterprise (or to the enterprise of one of your associated entities).

Whether redeploying an employee is considered reasonable will depend on the circumstances that exist at the time of the dismissal. Several factors are relevant when considering the concept of ‘reasonableness’ including:

  • whether a vacant position exists;
  • the skills, qualifications, experience and knowledge required to perform the job; and
  • the employee’s skills, qualifications, experience and knowledge.

Position vacant

If an employer has other positions available that the redundant employee has the skills to perform, even at a lower level, the employer shouldn’t assume that the employee will refuse the position. An employer can be found not to have engaged in a genuine redundancy because it failed to offer its redundant employee a position, which they had the skill set to perform, albeit the position carried a lower salary. Even if the employer in this case genuinely thought the employee would not accept a position which carried a lower salary, it needs to ask the necessary questions, because, for example, that employee might have been prepared to take on the lower paid job, or a position with fewer hours, because it meant it came with less responsibility or gave them extra spare time to spend with family. An employer should never presume an employee’s intention won’t be to accept a lower paid job or a job located in a different location.

Skills, qualifications, experience & knowledge

When determining whether another position is suitable, an employer must not only consider whether the employee has the current skills and competence required to perform the role, but also whether such skills and competencies could be developed within a reasonable period of time through the provision of training, mentoring or other support.

Associated entities

It’s also important to remember that an employer is not only required to assess whether there are any vacancies in the business into which an employee can be redeployed, but to also assess whether there are any vacancies in an associated entity.

In such a case, the redeployed employee would be considered to have had continuous employment into the new employer.

The present reality is that, due to the economic and social impact caused by the coronavirus, your business will probably need to make operational decisions to reduce costs and increase efficiency. This likely means that, due to redundancy being a cost-cutting exercise, redeployment will not be available in the circumstances. Nevertheless, you must still look for any opportunities for reasonable redeployment and offer these to the redundant employee if appropriate.

You’ve now determined that your business is undergoing a change to its operational needs, have consulted with impacted individuals and considered any opportunities for reasonable redeployment. You’ve now got to make the final decision on how to proceed, which we’ll cover in the next article.

Vaughan Granier is the National Workplace Relations Manager for HR Assured NZ. He has over 24 years’ experience in international human resources, health and safety, and workplace relations management. With over 10 years working in New Zealand and Australian companies, he provides in-depth support to leadership teams across all areas of HR, Health and Safety, and employee management.

Other articles in the series: