Last month we saw both Unisys and Rocom Wireless laying people off in one area and recruiting in another. Companies like Zespri are relocating (it plans a shift from Auckland to Tauranga), other firms shift head office to Sydney and expect to transfer the chief exec as well. Where do managers and employees stand in these decisions?
The law, alas, is not as clear-cut as we might hope, and largely depends on agreements between employers and staff.
“Just because an organisation is laying off staff in particular jobs in one area, be it within the company or in a different branch in a different geographical location, it does not mean they cannot rehire in another area,” says Mark Spencer of the Employment Relations Service (ERS).
Whether redundant employees have an automatic right to the new positions may depend on the contractual arrangements in place between the employers and employees, Spencer says, and may also depend on the skills needed to fill a particular role.
“If an employee is made redundant and is offered a position in another location, it is up to the employee concerned whether they accept the position or not. Redundancy compensation is not automatic either. There must be some specific mention of it in the applicable employment contract or agreement."
Engineering, Printing and Manufacturing Union national secretary Andrew Little says whether the redundant workers have rights to the new jobs created depends on how different the jobs are.
“They have to be significantly different [for the workers not to have rights]. They can’t be changes of one or two duties. An outsider would have to see that the jobs are different because their skills are materially different. If the jobs are [just] slightly different, they may have a case."
As with any employment termination, redundancy can lead to grievance cases. And where transfers are concerned, the Employment Court or Employment Authority can look at the "reasonableness" of them.
“Generally factors such as distance between the old and new site, the employee’s travel arrangements, suitability of public transport and family arrangements may be considered,” says Graeme Perfect, assistant manager of advisory services for the Employers and Manufacturers Association (Northern).
He cites a 1979 case where a 60km move from Petone, near Wellington, to Featherstone in the Wairarapa, with its associated travel difficulties, constituted redundancy. But a 1986 case involving a shift from Sockburn to Wigram in Christchurch did not.
Little confirms a person would be unlikely to have redundancy rights if a firm moved within, say, Auckland or some travel-to-work area, but could claim redundancy if a firm or post was relocated from Auckland to Wellington or Sydney. The person would also have the right to keep their job if they wanted the transfer. But they would have no right to keep their job in its existing location and would be redundant if they did not want to move, says Little.
Perfect says the Employment Relations Act brings the issue into focus as it requires employers to clearly describe the work to be performed and where.
“Employers therefore need to clearly think through carefully what their needs are when including these provisions in their new agreements. If a company operates branches in the same region and needs to transfer freely between these branches then that requirement has to be spelt out clearly in the individual employment agreement."
He says if the employee is to undertake clerical or sales tasks in addition to their technical tasks, that too needs to be dealt with in the individual employment agreement.
In addition, the obligations under the Employment Relations Act requires employers and employees to deal with each other in “good faith”, Perfect says. Particularly where there is a proposal by an employer to contract out or to sell or transfer all or part of there business or where the employer proposes to make employees redundant. "Recent court decisions have spelled out the need for employers to consult, where appropriate, to minimise the impact that redundancies might have on employees,” Perfect says.
Little notes that the possibility of an employer restructuring or relocating is now such a common thing, a clause that deals with that eventuality ought to be a standard feature of any employment agreement.