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Restructuring Redundancy Selection Processes

Posted on: Sep 07, 2012

We’ve all heard about the controversial “Massey v Wrigley” case, which has redefined the way we need to conduct our selection processes when restructuring, at least for the time being.  We’re hoping this piece of case law will change before too long, and Government has indicated that if it’s not resurrected through the Courts then a law change will be looked at around this in the future.

The Massey case has given guidance on what information, in accordance with s4(1A)(c) of the Employment Relations Act 2000 (the “Act”), an employer needs to provide to employees during a restructure, particularly where a selection process will be applied. Section 4(1A)(c) of the Act requires an employer who is proposing to make a decision that will, or is likely to, have an adverse effect on the continuation of employment, to provide to the employees affected with:

  • (i) 
access to information, relevant to the continuation of the employees’ employment, about the decision; and
  • (ii)
 an opportunity to comment on the information to their employer before the decision is made.

The Massey case has laid some surprising ground rules for what “all relevant information” includes:

  • All candidates’ interview sheets
  • A candidate comparison/summary of ratings sheet prepared by the selection panel
  • The panel’s recommendation
  • Notes created during the interviews
  • Information contained in the minds of the selection panel members including views/opinions on the    candidates’ strengths and weaknesses

The Court also stated in this case that s4 (1B) of the Employment Relations Act 2000– protecting the privacy of a natural person will not always be a “good reason” for withholding information.  It has been said that the Employment Relations Act trumps the Privacy Act so keep that in mind if you’re thinking of using privacy as a reason to withhold information…

 

Watkins v Canterbury District Health Board

The guidelines from the Massey case have been applied in a recent case at the Employment Relations Authority, Watkins v Canterbury District Health Board (CDHB), where the member found a personal grievance for unjustifiable disadvantage. The Authority held that the decision not to select/redeploy the employee to a new position was a decision that was likely to have an adverse effect on the continuation of her employment. Therefore, under s4(1A)(c) of the Act, the CDHB were under the good faith obligation to provide that employee with access to all information surrounding the decision and the opportunity to comment on it before any decision is made.

The Authority found that the CDHB did not provide Ms Watkins access to all of the relevant information. CDHB did not provide her with the questions and the competencies that were going to be assessed, the interview notes or the interview scores. Ms Watkins was also not given the opportunity to comment on these materials before the decision not to redeploy was made. The Authority found that these faults in the process were not minor and did result in unfair treatment. Ms Watkins was disadvantaged by this unjustifiable action was awarded $5,000 in compensation.

 

Recommendation

When undertaking a restructure which results in a selection process, it is important to provide all the information available to the employee and give them a chance to comment on this before making a final decision.  In practice, we appreciate this may be very difficult, and feel a bit wrong.  Before terminating an employee’s employment for redundancy where they have missed out as a result of a selection process, we recommend that at the very least you provide the employee/s with their scoring and the scores of the others they were rated against (we think it’s OK to block out the individual’s names if necessary), and provide them with the opportunity to comment on that information before a final decision is made.

This is an impractical and complex piece of legislation and therefore suggest you seek advice from one of our team before commencing any restructure process.

 

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

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