Human Rights and Redundancy

The Human Rights Commission has issued the following information about human rights and redundancy. This follows workers’ enquiries about their rights.

Legislation

A key objective of the Human Rights Act 1993 (the HRA) is to protect people eligible to work in New Zealand from being unlawfully discriminated against in employment.

However, to progress a discrimination complaint under the HRA an employee needs to raise a prohibited ground of discrimination (s.21 HRA).This means that unless an employee was made redundant on the grounds of sex, marital status, religious or ethical belief, colour, race, ethnicity or national origin, disability, age, political opinion, employment status, family status, sexual orientation or due to the use or intended use of the rights given by the HRA or the Protected Disclosures Act 2000 there is no recourse under the HRA.

Under the Employment Relations Act 2000 the parties to an employment relationship are required to act in good faith. This means that the parties must not mislead each other, either directly or indirectly. Good faith means more than mutual trust; it requires active, constructive engagement.

If an employer is considering making a decision that might involve making employees redundant, the employer is obliged to provide the employees with information about the decision and provide the employees with the opportunity to comment before any decision is made.

Advice to employers

In a redundancy situation employers should ask themselves the following questions:

  • Are the reasons employment is to be terminated the same regardless of, for example, gender, ethnicity, age, disability or sexual orientation? Are the same performance standards expected?
  • In times of job losses are workers from all groups represented in equivalent rates with respect to redundancies?
  • Would your termination processes and decisions withstand the rigour of a review by an independent third party?
  • Do all departing employees have equal access to outplacement seminars and skills workshops?
  • Do employees resign and is their employment terminated in similar or proportionate numbers regardless of the group they belong to?

Supporting redundant employees

  • Assist all employees to develop new skills and improve their employability, so they can adapt to changes in business objectives rather than take voluntary redundancy or termination. This is particularly important for older workers.
  • Ensure that access to appropriate services and financial information (for example, redeployment or voluntary redundancy) is available to and accessed by all groups of workers.
  • Ensure that managers are aware of the laws regarding unlawful termination on discriminatory grounds.
  • Formalise termination procedures.
  • Ensure that employees whose work performance is poor are counselled and given a chance to respond and improve. Take into account life circumstances which may impact on work performance.
  • Ensure that termination is not discriminatory (e.g. ensure that female employees with caring responsibilities are not made redundant because they are not able to travel on business or work weekends).

Redundancy payouts

Employment lawyer Peter Cullen, talking on TV One’s Breakfast programme said that unless redundancy provisions had been agreed in employment agreements, employers are not legally obliged to make redundancy payouts. In some sectors such as the public sector, redundancy provisions are still included in many employment agreements.

Peter Cullen informed viewers that in situations in which employers “muck up the process by not having a one (a process) or by not properly consulting you”, then it might be possible to take a personal grievance case.

Well over $12 million was paid out in redundancy compensation when Oringi Meatworks near Dannevirke closed, with payouts varying between $4000 and $60,000 depending on length of service. The Meat Workers Union provided the following advice to its members in the November 2008 edition of their journal The Cutting Edge:

“Redundancy payments may seem like a windfall even after tax is deducted. In fact they seldom amount to much more than six months’ earnings from the job lost. They are really only bridging payments allowing us and our whanau a little breathing space without immediate worries over food, rent, school expenses and the like. We need a month or two to decide what we are going to do for the rest of our lives.”

Further help

The Work and Income (WINZ) website provides some useful information for those who have recently been made redundant.

Generic information about seeking work is also available.

90 day trial period

Employers are able to use trial periods for employees, including part-time and casual employees but excluding contractors and volunteers, engaged after March 2009. The trial period applies only to new employees not previously employed by the employer and does not apply to either job promotion or to former employees returning to work. Both employers and employees must agree to the “trial provision” in the employment agreement when the worker starts. The legislation states that the worker cannot bring a personal grievance for unjustified dismissal.

In Bell Gully’s Employment Update December 2008 redundancy is canvassed.
“One interesting question will be whether an employee with a trial provision can be automatically selected for redundancy on the basis that they cannot bring a personal grievance.”

Employees under trial provisions cannot be treated differently other than the dismissal option within 90 days.