An employer can lawfully terminate employment on the grounds of redundancy. It is essential, however, that the employer goes about it in the correct manner. Girl Guides Association of New Zealand Inc recently found out the hard way.[1]
Pamela Galbraith was the Youth Services Manager from 1996 until 2007. She was then appointed Program Manager. In May 2009, she was dismissed for redundancy.
Ms Galbraith returned from annual leave on the 4th May. That same day she was presented with a letter advising that a restructure was underway and the position might be affected.
She attended a meeting on 11 May following which she was advised that if the restructuring proposal proceeded, her position would be disestablished.
There was a further meeting on 15 May. She made representations to Girl Guides. The meeting was briefly adjourned. When the meeting was reconvened, she was advised that her position had been disestablished and her work would be terminated immediately.
The Employment Relations Authority looked firstly at the process and secondly whether the redundancy was genuine. It made the following criticisms:
1 Girl Guides failed to provide proper and sufficient information about the proposal to restructure to enable Ms Galbraith to involve herself in consultation.
2 The letter to Ms Galbraith recorded that the Society wanted to deliver membership services in the most efficient and effective way possible. The letter stated that the role of Program Manager might be disestablished and work contacted out. Other work would be absorbed within the remaining organisation. The letter did not say that the impetus for change was a serious financial position (which was the primary reason for the restructure) nor did it put the proposed disestablishment into context with the wider structure of the whole organisation. It was put to her in very simplistic terms namely, disestablish and contract out or not. It was very hard for an employee to respond adequately to such a proposal.
3 Girl Guides should have explained the business rationale for the proposal and provide sufficient information to enable input.
4 There was no information on how the disestablishment of the role would reduce expenditure.
5 There was no evidence of any objective selection process or criteria for determining who was made redundant.
6 Because of lack of information, it was impossible to judge the effect of the disestablishment of the position and how that would positively influence the organisation in future.
7 Effectively, the lack of information was so fatally flawed as to prevent Ms Galbraith from making any viable observations as to an alternative strategy.
8 The applicant was awarded $17,500compensation for loss of wages and $16,000 as compensation for the distress, humiliation etc
Conclusions.
An employer considering restructuring which may lead to redundancy must consult in good faith. This requires providing information about the employer’s objectives, how the employer wishes to achieve those objectives and criteria for selecting any particular course of action that may impact on an employee.
An employee is entitled to have adequate time to consider the information and an opportunity to make comment.
Failure to follow the appropriate procedure will make it very difficult for an employer to show that the redundancy is genuine.
[1] Pamela Galbraith v Girl Guides Association of New Zealand Inc C. A. 139/10
Tags: consultation, Employment, redundancy, termination
