Restructuring and redundancy
An employer must have a genuine work-related reason for a redundancy. Employers may need to make changes in the workplace for a variety of reasons, such as:
- improved technology
- more productive business processes
- product changes
- loss of suppliers or markets
- a decision to contract out or sell some or all of the business.
The law requires employers to provide information to employees when they are considering changes that will affect their jobs and to give them an opportunity to contribute to any decisions.
The first step is to refer to the employment agreement, since that sets out the basis for the relationship and the procedures for changing its terms.
The more significant a proposed change is, the more likely it is that it cannot be imposed without the employee’s agreement. Even where the employment agreement states that certain changes can be introduced in the future, they should be introduced with early advice and discussion. Employees should have an opportunity to comment before an employer makes a decision.
Generally, there is no right to redundancy compensation unless employers and employees and/or their union have agreed to it. This can be done before or after an actual redundancy is planned. It is also up to the parties to decide what any redundancy compensation should be.
Where employees agree to a change, the terms of the employment agreement must be updated, signed by both parties and kept on file.
Employees may be able to raise a personal grievance if they believe their employer has acted unjustifiably in the event of a redundancy. For instance, the employer cannot use redundancy as a way of dismissing someone for reasons relating to the employee personally (such as the employee's performance).
Remedies are available through the Employment Relations Authority or the Employment Court.
Employers do not have to disclose confidential information if there is good reason to maintain the confidentiality of that information. Good reason to maintain confidentiality includes:
- complying with statutory requirements to maintain confidentiality
- protecting the privacy of individuals
- protecting the commercial position of an organisation from being unreasonably prejudiced.
Employers also have some specific legal obligations where a business is sold or transferred, or work is contracted out:
- Most employers must take the steps outlined in the employment agreement to protect employees in such situations.
- Employers who employ staff doing certain catering, cleaning, caretaking, laundry and orderly work have special obligations that provide continuity of employment protection to employees during restructuring.