SBM Legal Partner Bridget Smith and Senior Associate Matthew McGoldrick discuss the difficult issue of redeployment in a restructuring process. If there are no vacant roles in a business it does not mean that an employer has to create one so the employee can stay on, they write.
SBM Legal Principal Anthony Russell will give a presentation on the topic, Update on Social Media and Employment Obligations, at the Education Law Conference on Tuesday, 12 March in Auckland, while SBM Legal Partner and New Zealand Law Society President Kathryn Beck will present on The Importance of Diversity on Boards at the Directors and Officers: Obligations, Duties and Good Governance Conference on Thursday, 21 March in Auckland.
One of the more complicated issues that arises in a restructuring process is “redeployment”. This is essentially the obligation to consider whether an employee should still be employed (but in a different job) instead of being made redundant and losing their employment entirely.
In our experience, it is often overlooked. Further, many of the challenges that follow a restructuring process now focus on redeployment. Many challenges boil down to how “similar” another role is to the role an employee previously performed, and whether an employee should be “appointed” rather than having to be “interviewed”.
When does the obligation arise?
An employer conducting a restructuring process may go through a reasonably comprehensive process of: preparing a restructuring proposal; consulting with affected employees about the proposal; considering what employees have to say (and potentially amending the proposal); and making a decision on the proposal.
However, redeployment can often be overlooked. It isn’t the case that a decision on a restructuring proposal automatically means a person gets their notice of redundancy. It is at the point an employer decides that a person’s role is going to be disestablished that redeployment needs to be considered – before notice is given.
Does redeployment mean you have to create a role?
If there are no vacant roles in a business it doesn’t mean that an employer has to create one so the employee can stay on. But even then an employer still needs to engage with an employee about this fact. This is because an employer has to consider whether there are redeployment opportunities. If it has done that, and engaged with an employee about that, then this will cover off the obligation.
So what if there are vacant roles?
Sometimes there will be roles in a business that are vacant because someone has left and not yet been replaced. Other times, new roles will have been created out of the restructuring process itself.
How an employer deals with redeployment in this scenario will often come down to how “similar” those new or vacant roles are to what the employee previously did. It will also come down to the skills an employee has, and whether those skills are transferrable to a new or vacant role. If the employee has the skills to perform the new role then he/she is entitled to be offered it, not just the opportunity to apply for it.
This does not mean that an Accounts Administrator whose job has been disestablished should be redeployed into a General Manager’s job. But it may mean that such a person should be redeployed into (or at the very least considered for) a newly created Administration Assistant job. It will largely depend on the employee’s skills and experience and whether they could perform the new role, either now or with reasonable training.
There might also be scenarios where two or more positions have been disestablished, and there is now only one role available. In that scenario it would generally be expected that an employer would run a “selection process” to select who gets the job. That process should be exactly the same for all candidates, so that everyone gets a fair go. It would also be normal for that to be “closed” to those whose roles have been disestablished and were similar to the new job.
Can you “go to the market”?
For some state sector employers, there are specific legal obligations which require advertising of vacant roles, and the appointment of “suitably qualified candidates”. However, for all other employers there are no such obligations, and the legal principles generally require internal candidates to be preferred.
In the same way, asking an existing employee to be interviewed, while at the same time inviting applications from the market can be risky. If a new person gets the job – and the existing employee gets made redundant – it can provide fertile ground for a personal grievance claim. But there may be justified situations where going to the market is OK.
All in all, redeployment is a complicated beast, and can sometimes lead to a really good process falling down at the final hurdle, so it is important to deal with the obligation carefully in every case.
Partner Bridget Smith was appointed a Partner on 1 May 2012 having joined the firm as a Senior Associate in March 2011. Prior to that, she worked in the specialist employment teams of two national commercial firms. Bridget advises on the full range of employment law issues for both employers and employees alike. She has broad advocacy experience. She has also appeared in the High Court and Court of Appeal, together with the Royal Commission on the Pike River Coal Mine Tragedy and also makes regular appearances in the specialist employment jurisdictions. Bridget is a regular commentator on employment law issues in publications such as the New Zealand Herald and on stuff.co.nz. In addition, Bridget is regularly sought as a presenter at both client and industry seminars. Bridget’s strengths include her commitment to understanding the issues faced by her clients and the impact on their businesses or on them personally. She thinks practically and pragmatically to achieve commercial and workable solutions. Who’s Who Legal International rate her as an expert (alongside Penny, Kathryn and Don) and Chambers and Partners have referred to her as ‘thorough and responsive’. Contact Bridget at [email protected] or connect via LinkedIn
Senior Associate Matthew McGoldrick joined SBM Legal as an Associate in October 2012 and was appointed Senior Associate on 1 July 2013. He graduated with a Bachelor of Laws and Bachelor of Commerce (Economics) from the University of Canterbury in 2006. Prior to joining SBM Legal in 2012, Matthew was employed as a solicitor in the Wellington employment law practice of a national law firm, and in the employment law practice of the Wellington Crown Solicitor’s office. He also spent time practising employment law in the United Kingdom before returning to New Zealand. Matthew has regularly represented employers and employees in mediation and has experience representing clients before the Employment Relations Authority, Employment Court, District Court and in the High Court. He is regularly called upon to provide advice on varied matters such as restructuring and redundancy, disciplinary matters, termination of employment and health and safety. Matthew takes a practical approach to solving employment relationship problems. His strengths include his ability to provide sound legal advice that is able to be understood, and his ability to focus on generating solutions for his clients. Contact Matthew at [email protected]
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