Preston Russell Law - Legal Services for Southern People

Consultation Crucial in Redundancy Process

by Mary-Jane Thomas, partner category Employment Law

The Employment Relations Authority awarded Mr M, a conference manager, $5,000.00 compensation after finding that his redundancy amounted to an unjustified dismissal. While Mr M’s employer, Conferenz, made the decision for genuine, justifiable, commercial reasons, the selection procedure used was unfair.

Conferenz announced on a Thursday that redundancies were possible due to a slump in business. Staff were told the general criteria which would be used to select employees for redundancies, but they were informed that meetings would be held the next day for them to suggest alternative solutions.

These meetings took place but ultimately Conferenz decided that one of the conference managers’ positions would be made redundant.

On the Monday all staff were advised of the decision and that interviews would be conducted that day and the next with each staff member to determine who would be dismissed. All staff were asked the same questions. Afterwards the directors ranked the six conference managers. Both ranked Mr M last. He was subsequently made redundant. The employer put weight on Mr M’s difficult attitude and that he did not display a commitment to remaining with the company long term.

The following aspects of Conferenz’s consultation process were unfair:

Firstly, employees were not told how the selection criteria would be applied and how they would be ranked. They had no opportunity to discuss the process and provide input. Mr M was not made aware of the weighting given to different criteria. Nor was he given an opportunity to comment on his ranking compared to others.

Secondly, the Authority was concerned that within just four working days of being told that redundancies were a possibility, Mr M was dismissed. There was no urgency preventing the process from being extended to allow for more consultation.

The Employment Relations Act 2000 requires employers and employees to deal with each other in good faith. When any adverse decision is to be made against employees, they must be fully informed of the situation and be given an opportunity to be heard on all matters. In redundancies, it is even more important that no decisions are made without staff input. Of course an employer may have a fair idea of the way they wish to proceed, but it is necessary to be open to suggestions.

Redundancy can be devastating for employees, so it is only fair that they are listened to and respected.