In the current economic climate it is more important than ever to manage your resources, including people resources, to best effect. Hard times can bring issues that have been simmering in the background to a head, and raise new ones that you may never have dealt with before.
If you’re recruiting you need to ensure you get the right person. Prior to the downturn people were able to move on if they weren’t satisfied with their job for some reason.
But now they’re likely to stay put, and resist being moved on. As financial pressures increase there’s potential for misconduct issues such as theft or fraud. Stress can take its toll and manifest itself in staff performance issues and compatibility issues between staff.
However workplace dissatisfaction arises, employers bear the brunt of it. Managing it and the demands of keeping the business running can be a challenge.
In the second of a three-part series of articles, RMBF in-house counsel Leoni Carterlooks at restructuring and redundancy, and some things to consider at the beginning, middle and end of an employment relationship.
You may be faced with having to make some positions redundant. Redundancy is a form of dismissal, so it is essential you go about it in a “substantively justifiable” and “procedurally fair” manner, as well as following the terms of the employment agreement.
Don’t plead redundancy if the issue is really about a particular employee’s performance — it is the position that is redundant, not the person.
The courts will respect your commercial judgement in making a position redundant, but have little sympathy if the real motivation is to get rid of someone.
Ensuring “procedural fairness” is neither difficult nor complicated. As with most employment issues there’s a process to be followed. Give yourself sufficient time to get through it.
Generally, “fairness” means:
• Genuine commercial reasons: That you have done an analysis of your business and prospects for work into the near future.
• The employment agreement: That you have checked the employment agreement and followed any process laid down.
• Criteria: That you have decided a criteria to select which position/s the business will no longer require to do the foreseeable work programme (“last on, first off”, qualifications, skills, experience).
• Consultation: That you arrange a meeting with all employees to discuss the state of business and listen to their feedback. Consider what you have heard — you may be pleasantly surprised! If there genuinely is a choice of employees with the same job description, apply the criteria fairly.
• Notice: That you have given a reasonable notice period (if not specified then at least one pay period).
• Compensation: Check the employment agreement. Is there a redundancy clause? Is compensation payable?
Assistance
You should think about what assistance you can give to the employee, even if it is only information.
Refer them to the “Restart” programme for example: www.workandincome.govt.nz/individuals/a-z-benefits/restart.html.
Not managing these issues well can result in a personal grievance (PG) against you. Unfortunately, in hard times, PGs are seen by some as a means of getting some money out of an employer, and even as a means of leaving a job and being eligible for the unemployment benefit with no stand-down period.
