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Home / New Zealand

<i>Your rights:</i> Redundant after starting new job

Rani Amaranathan of Phillips Fox
15 Oct, 2006 05:58 AM4 mins to read

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I left a good job to start work at a hotel. But I was only there for two weeks when the hotel was bought by an Australian company and I was made redundant along with 39 others.

The decision to make me redundant was strange as it had taken the
hotel 10 months to find someone to be able to do the engineering job I was employed to do.

My employment contract offered one week's notice either way, and after the trial period it was increased to four week's notice.

I got one week's pay in lieu. I believe they should have paid me four weeks pay in lieu as there was nothing wrong with my performance and I was told it was cost cutting when I was laid off.

What do you think?


As I said in a previous column, trial periods can be a useful way for the employer and employee to find out if the employee or the job is right for them.

Unfortunately, your trial period seems to have benefited your employer for reasons not related to finding out if you were right for the job. You happened to be made redundant during the notice period and were given only one week's pay in lieu of notice instead of the four weeks you would otherwise have got.

This is one of the reasons trial periods are controversial. Whether your employer was entitled to give you only one week's notice depends on the terms laid out in your employment agreement.

Any trial period must be included in a written employment agreement. Your notice entitlement depended on whether the shorter notice period in the trial period clause of your employment agreement applied to redundancy during the trial period. You need to check your employment agreement to see whether this was the case. If your trial period clause provided for one week's notice if your employment ended for any reason during the trial period, then you received the correct entitlement.

But if, say, the one week's notice in your trial period clause was limited to dismissals for poor performance or misconduct, then you were entitled to four week's notice for redundancy (if the agreement said elsewhere that four week's notice of redundancy would be given).

You should also consider whether your dismissal for redundancy was justified. If you consider you were not genuinely redundant, you may have grounds for a claim. You might also have grounds for a claim if your employer did not follow a fair process before making you redundant.

A fair process usually means consulting about the effect of a business sale before redundancies are made, explaining who might be made redundant and why and having fair reasons to select employees for redundancy if only some employees will be made redundant.

You also say you were paid in lieu of the one week's notice. An employer cannot pay you instead of letting you work out your notice period, unless your agreement provides for this or you agree.

If you were entitled to four weeks notice, you can bring a claim.

The fact you were on a trial period does not prevent you bringing a claim against your employer. You might also have reasonable grounds for a claim if you were entitled to four weeks notice but only paid for one, or if you consider your redundancy was not justified.

To prevent this happening in future, check the employment agreement carefully when you are offered a new job. If it includes a trial/probationary period, check whether there is a shorter notice period during the probationary period. If there is, check whether the shorter period applies if you are made redundant. If it does, you can negotiate with your potential employer about changing the employment agreement to say that the shorter notice period does not apply to any redundancy during the probationary period.

You can always seek legal advice about the terms of an employment agreement before you sign it and start work.

* Rani Amaranathan is a solicitor in the employment team of transtasman law firm, Phillips Fox.

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