A recent Employment Court case has shed some light on an employer’s duty to redeploy an employee to a vacant role as an alternative to making him or her redundant.
Employee asked to apply for alternative role
Wang v Hamilton Multicultural Services Trust [2010] NZEMPC 142 involved a financial administrator whose role evolved along with his employer’s business. After unsuccessfully trying to renegotiate his job description, the employer decided the position of financial administrator would be disestablished, and a new role of finance manager created. This role had more responsibility and attracted a significantly higher salary.
The financial administrator was asked to apply for the role of finance manager as the employer felt he would be able to perform the duties, with some up-skilling. However he refused to apply, on the basis that he did not want to appear to agree with what his employer was doing in case it jeopardised his personal grievance claim.
The financial administrator’s employment therefore ended on the basis of redundancy. He raised a personal grievance claim for unjustified dismissal.
Employer failed in its obligations
The Employment Court held that although the financial administrator’s redundancy was genuine, the employer had failed in its obligations by not redeploying him to the finance manager role, and instead terminating his position and then asking him to apply for the new role.
The Court reached this conclusion on the basis of the following factors:
- The financial administrator was well able to perform the majority of the duties of the newly created position;
- Only minor up-skilling would be required for the remaining duties; and
- He was encouraged to apply for the new position.
Senior position retained
Observations on redeployment were made even more recently in a (non-binding) Employment Relations Authority determination, Robertson v Arcad Ltd [2012] NZERA Auckland 418.
This case involved a graphic designer whose employer experienced a downturn in business and proposed a restructure. The proposals included making the graphic designer’s position redundant, but retaining a senior digital designer because of his particular skills.
During the consultation process, the senior digital designer resigned. The graphic designer was still given notice of redundancy, but was encouraged to apply for the senior position. He didn't do so and his employment with the company ended.
The graphic designer’s personal grievance claim focussed on whether he should have been redeployed to the senior digital designer's position. The company claimed it was not required to redeploy him as his position was not "substantially similar".
Parties must engage in meaningful discussion
The Employment Relations Authority observed it was conceivable that the obligation to be active, constructive, responsive and communicative under section 4(1A) of the Employment Relations Act 2000 could lead to the redeployment of an employee to a position which is not substantially similar to the position to be disestablished, yet is within the employee's skills and experience.
This is not to say, said the Authority, there is an obligation to offer an employee a different position from the one which they were engaged to perform, only that the parties have an obligation to engage in a meaningful way about reasonable alternatives to dismissal.
Redeployment to another position for which the employee has insufficient relevant skills, or which requires significant amount of retraining, or which has the effect of displacing an incumbent, for example, are unlikely to amount to a reasonable alternative.
In the graphic designer’s case, the company's concerns about his shortfall in the skills and experience necessary for the senior digital designer's position were not put to him before making the decision to terminate his employment. He was deprived of the opportunity to discuss his ability to perform the duties of the role in circumstances where the discussion could have affected the outcome.
This was not a minor defect in the process and rendered his dismissal unjustified. The Authority ordered the company to pay the graphic designer lost remuneration and $3000 compensation for injury to feelings, taking into account his contribution by not applying for the job, etc.
