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Redundancy: hiring someone new to replace you may be fair game

Redundancy: hiring someone new to replace you may be fair game

2.4.2012 16:22
Autor: KŠB, KSB

Companies need to operate effectively and therefore from time to time they may need to change the composition of their employees. As such, certain positions may be eliminated and new ones created. In the eyes of fearful employees, being made redundant may be a consequence of such measures. It is not uncommon for employees to believe that if they are made redundant or if “their” positions are eliminated then the employer cannot have any more work for them and they are then surprised to learn they are still expected to carry out their duties until their employment terminates.

Another surprise comes when, after receiving news of the organizational changes and being made redundant, they learn that the company plans to hire new employees – even after they leave the company! Such emotions often lead the employee to file an action against the employer for unfair dismissal, arguing that redundancy surely cannot exist if the company plans to hire new employees.

Three conditions for redundancy

Similar frustrations led an unnamed university employee to file just such an action. The case eventually reached the Supreme Court, which set out the conditions that must be fulfilled in order for an employer to make an employee redundant: the employer must decide to change its tasks or its technical equipment, to reduce the number of employees in order to increase work efficiency or to make other organizational changes. Following its decision, a specific employee becomes redundant and his/her redundancy must be the result of such decision (a causal link must exist).

Employers are solely responsible for deciding who is to become redundant and the courts are not competent in assessing the factual aspects of their decision, let alone change it. The law allows employers to regulate the number and composition of their employees based on their needs. How could it be otherwise in a democratic society with a free market system? This, however, does not mean that employees should be exposed to their employers’ whims – employees are protected by legal conditions that must be met before employment can be terminated due to redundancy.

The Supreme Court also restated that it does not consider an employer’s decision to make organizational changes to be a labour act but rather a factual act. The decision itself does not automatically lead to changing or terminating an employment relationship. The decision is only one of the conditions – it constitutes the grounds for making a decision to terminate an employment relationship with a redundant employee. Nothing changes for the employee until he/she is notified of the decision and given notice of redundancy.

Nothing more, nothing less

The court is thus competent only to investigate whether a decision was made and whether it was made by the person entitled to do so (an employer in the case of individuals, or a statutory body in the case of legal entities). Nothing more, nothing less. Whether the decision was made depends on the contents of the decision and not on its stated form. In other words: where the employer’s decision indicates that the employer is making the planned changes with the intention to change certain tasks or technical equipment, reduce the number of employees to increase work efficiency or make another organizational changes, the decision can constitute the grounds for dismissing an employee due to redundancy.

In conclusion, we should add that, in the case in question, the position of a “manager” (senior lecturer) in a foreign languages department was eliminated by the employer’s (a university’s) decision and a new employee was engaged in the position of a lecturer. The total number of employees remained the same, but the employee structure in terms of qualifications changed. The court confirmed that the employer’s decision was in compliance with the law and that the act was not discriminatory.

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