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One of the considerations that employers need to make when undertaking a restructure and making roles redundant, is whether there are any redeployment opportunities for the impacted employees. See our previous article on restructures, which noted that, "During the consultation phase, you must consider and discuss with the employee whether there are any redeployment opportunities for them within the business, or if there are alternatives to redundancy, such as reducing hours or taking a period of leave".
In a recent case before the Employment Court, NZ Steel v Haddad, the redeployment obligations of an employer in a restructuring process were examined in detail. The case involved Mr Haddad, whose position at NZ Steel was disestablished during a restructuring. From the outset, Mr Haddad made clear to NZ Steel that he wished to be considered for redeployment and specifically for Project Management roles.
The Court found that despite Mr Haddad's expressions of interest, NZ Steel denied Mr Haddad an opportunity to be considered for these roles by failing to respond to Mr Haddad's queries. Even when one of the applications from another applicant did not proceed, NZ Steel did not give Mr Haddad any consideration for the role. Furthermore, Mr Haddad's application for another position, Legacy Platform Manager, was not dealt in good faith nor fairly by NZ Steel as NZ Steel had already earmarked the role for another employee.
The Court emphasised that in accordance with the Employment Relations Act 2000, an employer must act in good faith and consult with employees when considering redeployment. Additionally, the employer must be responsive and communicative and take a proactive approach to maintaining the employment relationship. The Court also confirmed that it can consider the merits of the employer's redeployment decision. Interestingly, the Court stated that it was a risky strategy for Mr Haddad to refuse attending interviews NZ Steel invited him to for other roles. However, it was found that NZ Steel had breached its obligations and Mr Haddad was awarded reinstatement, lost wages, and compensation.
This case serves as a reminder of the importance of good faith and genuine consultation when considering redeployment opportunities for employees during a restructuring. If you are considering a restructure, please reach out to Melissa or Hiruni and get advice before commencing the process.
Melissa Johnston (Partner) on (09) 306 6729 (mjohnston@mcveaghfleming.co.nz)
Hiruni Wijewardhana (Solicitor) on (09) 262 4940 (hwijewardhana@mcveaghfleming.co.nz)
See our Expertise pages
Written by Melissa Johnston, Hiruni Wijewardhana and Gus Hardie Boys
© McVeagh Fleming 2023
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice. If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.
