George Clooney plays the part of Ryan Bingham, a corporate downsizing expert, in the movie Up in the Air. Bingham loves his job because he is constantly up in the air flying from one city to another and getting paid by large corporates to tell their employees the bad news – that they have lost their jobs as a result of redundancy.
I was watching Up in the Air thinking about the employers who engage Bingham to have the hard conversations with their employees, on their behalf. The truth is – a conversation with an employee about the possibility of making their position redundant is unpleasant. It’s stressful for both the business owner who is often struggling to work through cash-flow and revenue issues – and also for the employee who faces an uncertain future. Of course all of this plays out in the context of a legal framework which places a high value on the employer adhering to the correct process, and ultimately being able to justify the decision to make a position redundant.
Over the years the Employment Court has released numerous judgements which provide excellent guidance to employers – especially employers who are not able to call on the assistance of a Bingham type character – to guide them along the way. Last year the Employment Court issued an important decision: Stormont v Peddle Thorp Aitken Ltd. Peddle Thorp is an architectural practice which employed Ms Stormont as an interior designer. The employer decided that they wished to change tack by focusing on developing a discrete set of clients for the interior design part of the business. It didn’t turn out as expected, and the employer decided to discuss with Ms Stormont their proposal to make the position redundant. There were meetings with Ms Stormont about the proposal and information was provided. Ultimately Ms Stormont’s employment with the company was terminated by reason of redundancy.
However the Court said the company ultimately didn’t consult adequately, nor was the employer able to justify their decision to make Ms Stormont’s position redundant. Ms Stormont had been unjustifiably dismissed. The employer was ordered to pay the equivalent of 6 months remuneration and $25,000 in compensation.
It seems, at least from watching a movie such as Up in the Air, that in the USA an employer (or their choice of representative) can simply walk into a meeting tell the employee (or employees) their position has been made redundant. A very straight-forward approach that suited Bingham’s manner and style. Contrast this with the approach in New Zealand – which is very prescriptive, and places the onus on the employer to ultimately not leave employees up in the air when it comes to ensuring the right process is followed.
We’re here to help ensure no part of a redundancy process is left up in the air, whether you’re facing it from an employer or employee perspective. Please contact our employment team for advice on your particular situation.