Offering alternatives in lieu of redundancy

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Mention of redundancy tends to make most people think of compensation for the loss of a job, but employers actually have an obligation to consider other options – like redeployment – before completely terminating someone’s employment.

An employee whose role is being disestablished should be considered for appointment to any available new or vacant roles in the first instance, rather than having to apply for those as part of a contestable process with external candidates, employment specialist Karen Radich from Clifton Chambers said.

Further, employers should be mindful of the test of justification in the Employment Relations Act, she added. “Where existing roles are disestablished and new roles are created that have no substantial difference, the basis for terminating a person’s employment for redundancy at all will be in jeopardy.”

Even if the person’s employment agreement (or the relevant HR policies) did not contain a detailed process for considering matters such as reconfirmation, reassignment or redeployment options, as a matter of ‘good faith’, employers should consider whether there were any other options available before the outright termination of an employee for redundancy, Radich said.

“If reconfirmation is not a viable option the focus should then be whether there are any other options for the employee to remain employed with the employer,” she continued. “Even if an affected employee does not submit an expression of interest in a role, they should still be considered in relation to any possible suitable role.”

A reassigned position will inevitably be different from an employee’s current position, Radich said – and suggested that, when considering an employee for reassignment or redeployment, employers should think about:

  1. The duties performed in the employee’s current role, and how they compared with the duties required in the proposed new role. This would involve examining the proposed position description against the employee’s current position description;
  2. The employee’s known skills and abilities, and how these skills and abilities might correspond to the skills and abilities required for the proposed new role; and
  3. The employee’s potential to be retrained (or any training options that might increase the employee’s ability to do the job). Relevant training needs should be identified at the same time any offer of reassignment is made.

It was also worth noting that the relevant employment institutions did not look favourably on situations where a position was genuinely no longer required, but the process followed in filling new positions in the structure did not occur fairly and transparently, Radich said.

Key HR takeaway:

If an employee whose role was being disestablished could reasonably be redeployed to a new role that was created in a restructuring situation, even if some up-skilling or training was required, then the employer would need to offer that option to the employee, Radich said. “This is particularly the case where an existing employment agreement anticipates such a process – and includes provisions relating to it.”


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