Redundancies   

The Employment Relations Act 2000 provides that employers and employees must treat each other with the utmost good faith. This duty of good faith is defined as being wider than ordinary good faith.

Employers must follow a full justification process prior to making employees redundant.

They must:

•  Advise all possibly affected employees that they are considering making some employees  redundant.
•  Give reasons why they are considering redundancies. These reasons must be reasonable. The employees must be provided with access to all relevant information.
• Consult with employees and consider any alternatives, particularly those proposed by affected employees.
• Use a fair (and transparent) process to select those employees who are to be made redundant.
• Try to transfer redundant employees to other roles.

Redundancies are not an opportunity to get rid of particular employees.

Where an employee has been made redundant, without any proper process and/or justification, the Employment Relations Authority considers compensation: 

• For humiliation and distress often between $3,000 and $8,000 (not taxable) and 
• For Loss of earnings usually to a maximum of 3 months.

The compensation for loss of earnings is based on salary, less income, for the 3 months immediately after termination. The claimant has to be able to show they have tried unsuccessfully to find employment. 

The authority will consider all factors in its determination. 

If your employer is planning redundancies you need advice so you can make appropriate submissions during the process.