Today’s small business owners know that they must sometimes make tough decisions in order to continue to succeed. Things have changed a great deal in the past few years, especially in New Zealand. Kiwis are well aware that changes sometimes have to be made in order to survive these days. Tough decisions are often unpleasant for everyone though and many business owners are looking for the best methods of restructuring with a minimum longer-term impact. Professional guidance and support can enable the process to go smoothly when it comes to redundancy NZ. The process may have some serious pitfalls for redundancy in the workplace.

Restructuring your business after COVID-19

Kiwis across New Zealand have come to learn that life is changing. It doesn’t look like things will go back to normal anytime soon. Perhaps this is the new normal for all. But in the midst of this global tragedy, Kiwis still need to earn a living. There are still bills to pay and everyone needs to eat. For some business owners, this has been especially painful because sales are low and profits down. This leaves them with some difficult decisions to make if they want to survive Redundancy is the word of the day and many treasured staff members may fall by the wayside during this time of restructuring. Maintaining employment equity in the workplace is essential and prevents unfair redundancy NZ.

Redundancy NZ

Redundancy NZ definitions

It may be helpful to consider the definition of redundancy NZ as shared by FindLaw. “Redundancy is generally considered to be a situation where an employee’s position is surplus to the employer’s commercial needs. It is important to remember that it is the position that is surplus, not the employee. If a “redundant” person is replaced by someone else in the same position, the redundancy is very unlikely to be justifiable.

Section 4 of the Employment Relations Act 2000 requires employers to act in good faith when making employees redundant. It also requires an employer who is proposing to make a decision that will, or is likely to, have an adverse effect on the continuation of employment of one or more employees to provide those employees with relevant information and an opportunity to comment before the decision is made.”

Caution: Care must be taken when declaring an employee’s position redundant. Employers must ensure that they do not try to use “redundancy” as a means for dismissing troublesome staff.

Due to the significant risks associated with making people redundant, it is advisable to seek advice before proceeding with a proposal that could result in redundancies.”

As we review the current times and look at Employment NZ’s definition of redundancy NZ, they share the following:- “when an employer reduces their workforce, including because of financial factors, or functions that are no longer needed or relevant to their business model, or when there are changes in consumer behavior. It’s an outcome of a restructuring process.”

Restructuring can keep profits strong even during a nationwide crisis like covid-19. There are rules about this practice. Employment NZ stresses the importance of Section 4 of the Employment Relations Act 2000. This rule of law “requires employers to act in good faith when making employees redundant.”

Caution: Employers cannot make someone redundant, then hire another person to fill that same position. Even if they change the job title, this is not allowed. Also, redundancy cannot be used to remedy situations where employees are not performing well.

In order to move through the restructuring process and carry out a fair and impartial redundancy, it is recommended to –

Follow the step-by-step process so mistakes can be avoided. Employers can come out of this process with a stronger business structure but remember that employees should be treated fairly. If the regulations are not followed, the process of redundancy can cause negative repercussions that can affect your business and the employees who are made redundant. The Business NZ’s helpful resource page has important information about following a fair restructuring and redundancy plan.

The most important thing you can do is to get professional advice on redundancy law NZ. This supports your business and ensures that your restructuring process is compliant with current employment legislation. This can help business owners to avoid common pitfalls and complete the process smoothly.


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