Running a business in Christchurch means often dealing with uncertainty, preparing for the worst and hoping for the best. Trying to run a business while dealing with the COVID-19 outbreak is no exception.
Even as Finance Minister Grant Robertson announced the government’s support package for Kiwi businesses, he said “We don’t yet know what the full impact on New Zealand’s economy will be, however we do know it will cost us jobs and have a significant impact on business.”
Without being alarmist, restructuring and redundancies are an unfortunate reality in uncertain times.These are big decisions that impact people’s lives and livelihoods, so it’s important they’re handled properly and with sensitivity.
One of our partners at Godfreys Law, Brad McDonald has been practicing law for almost two decades. He heads up our employment law team, and has helped many businesses around Canterbury with all sorts of employment issues.
Always Seek Legal Advice
Before making any kind of decisions around restructuring your business, talk with us first. By seeking help early on, we may be able to put plans in place that help you avoid these options.
The government is making help available to businesses to deal with the COVID-19 outbreak. You might be entitled to financial assistance in the form of wage subsidies or tax breaks.
If, even after exploring these options, we can help you follow the correct procedures and policies around restructuring or downsizing.
Downsizing Your Business
If you’re considering downsizing or redundancies, you need real world statistics or evidence for doing so. Just claiming it’s a result of coronavirus isn’t enough. You’ll need to prove you’ve sought government assistance, and have financial evidence to justify your decision.
Employees, their lawyers or advocates will be looking to attack your evidence or claim the restructuring or redundancy measures are being done for other reasons. It’s vital you’ve sought legal advice before making any kind of announcement to ensure you have proper evidence and are following due process.
Common Redundancy or Restructuring Mistakes
The biggest mistakes employers make when looking to make people redundant are a lack of process, or failing to refer to a written employment agreement which outlines how things should be done. Worse still are ‘instant dismissals’ and thinking people can be fired on-the-spot.
As an employer, not getting the process right or terminating someone without any due process opens you up to an unjustified dismissal grievance from your former employee. You can also expect awards of $20,000 plus costs and legal expenses for both parties. Your final total you could face for an unjustified dismissal may be closer to $30,000. It’s better for you and your business if you avoid these fines by following the right process from the beginning.
To avoid penalties or lawsuits from your employees, the best path is to stop, think and review before you act and speak. It’s impossible to take back that emotionally charged comment once it’s left your mouth, so pausing and reflecting before charging in is always a better course of action.
We Can Help You Follow The Right Process
If you’ve exhausted all other options and sadly come to the conclusion that redundancies are necessary, our employment law team can take care of the process that needs to be followed, and advise you at each step of the way.
We can manage the process outlined in your written individual employment agreements so it’s followed properly. If you haven’t outlined a redundancy or restructuring process, we can craft a good faith process for you that will stand you in good stead and lessen the chance of retaliation. We will walk you through that process step-by-step, giving you all the support and documentation you need.
If you have any questions around restructuring or redundancies, you’re feeling lost or thinking of going down this road in the near future, please get in contact. Employment is one of our areas of expertise at Godfreys Law and we have a number of people who can help.
Contact Godfreys Law today on 03 366 7469 to get in touch with our employment law team.
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