After going through a full restructure process, you may have to make some roles redundant.
Although redundancy is about roles, not people, people are affected. It can be a difficult and upsetting process. Follow these steps to make sure you’re being fair, following best practice and doing everything you’re legally required to do.
You can’t make someone redundant without going through the full restructure process first. That process has five steps. The steps for redundancy pick up at the end of that process.
The process isn’t prescribed exactly, but case law has helped to establish best practice. The steps and suggested timeframes are outlined below, and also in these handy guides:
If you think you may need to make some of your employees redundant talk to Work and Income. All discussions are confidential and they can provide support for your business and the employees including making a financial contribution to wages and training.
Find out more about redundancy support(external link) — Work and Income
Follow the first five steps set out on our Team restructuring page, where you’ll find a task list outlining the steps and suggested timeframes.
If this leads to removing roles, here’s how to handle the next steps.
You must confirm the final structure to employees who are being made redundant. This letter should include:
You could also include:
Redundancy clause(external link) — Employment Agreement Builder
You only need this step if your employee asks for a meeting to discuss the restructure and redundancy. At this meeting, you should:
Complete these employee exit lists to make sure you’ve done everything you need to do.
Marama wants to take a new direction with her business, so she restructures her team. Phil’s role is to be made redundant. Marama offers to let Phil not work during the last two weeks of his redundancy notice period. Phil accepts.
Phil is grateful because he gets the satisfaction of completing critical tasks before those last two weeks — and he has time to get his CV ready and start applying for other jobs before being without pay.
There are ways to make the redundancy easier for you and your employee, in the lead up to them finishing. You can:
On or before your employee’s last payday, you must: