Is it time to re-think our redundancy laws?

In New Zealand redundancy compensation is not compulsory and so many businesses have no provision to pay anything other than the standard notice period.

In New Zealand redundancy compensation is not compulsory and so many businesses have no contractual requirement to pay anything other than the standard notice period which they often expect the redundant person to work.

I was taught by a wise old HR professional early in my career that redundancy should be a penalty on the organisation. However, the reality is it rarely is. Too often the poor employee on the wrong end of redundancy is the one penalised. Left with no job and no compensation while to the organisation it’s nothing more than a minor inconvenience.  The cards are stacked too far on the employer side.

In the current COVID-19 pandemic environment, too many people are losing their jobs with little or no hope of finding something else soon.

So just a suggestion but how about we make redundancy compensation compulsory in New Zealand with a minimum compensation payment of one month?

And while we are at it, why not make it tax free so the recipient gets the maximum benefit? Better for the redundant person but no extra cost for the employer.  We can do it for Section 123 payments made for hurt and humiliation under the Employment Relations Act, so why not redundancy as well?

Isn’t it time we got a bit more thoughtful about workplace redundancy and put people first?