Selection Criteria When Restructuring: the Do’s and Don’ts

The employment law consequences of the COVID-19 pandemic are inseparable from the financial consequences. During this crisis, many businesses have had to make tough decisions about the feasibility of their workforce, leading to small to large scale restructures throughout the country.

One of the most litigious aspects of a restructuring process involves selecting which employees will be retained where an employer is reducing the number of employees all holding the same (or substantially similar) roles.

• For example: A supermarket has 20 employees stocking shelves, the supermarket now only requires 10 employees to stock the shelves. The supermarket must carry out a selection process to determine of the 20 employees, who will be ‘best suited’ to retain for the 10 roles.

Below are some Dos and Don’ts for employers to consider when carrying out a selection process.

The Dos

  • The selection criteria should be as objectively measurable as possible (i.e. based on verifiable data and facts).
  • Each category of the selection criteria should be given an appropriate weighting.For example:

the category is ’Relevant Qualifications for the Role’, no qualifications could be given 0 marks, an entry level certificate relevant to the role could be give 1 mark, and a tertiary qualification relevant to the role (such as a university degree) could be given 3 marks.

  • Once the selection criteria have been formulated, they should be provided to the employees and their representatives for their feedback (before proceeding any further), with information on how the selection criteria will be applied, which employees/ roles will be in the selection pool and who will be on the selection panel.
  • Employees should be given the opportunity to comment on their tentative selection scores before they are finalised.

The Don’ts

  • The selection criteria should avoid any criteria that could be discriminatory, such as criteria that marks an employee down for:
o Attendance record: where the employee’s lack of attendance is related to legitimate sick leave, bereavement leave or parental leave.
o Visa status: including whether the employee is a New Zealand citizen or resident.
o Availability to work over lockdown: this is an interesting criterion that has been raised post lockdown. Although it has some merit, employers should be careful in incorporate this criterion where employees had legitimate reasons not to work over lockdown, as the result could be discrimination against an employee. Such as, the employee was classed as ‘vulnerable’ to COVID-19, someone in the employee’s bubble was classed as ‘vulnerable’ or the employee could not organise childcare arrangements over lockdown to allow them to attend work.

The employer must not proceed to decide who will/ will not be selected for the remaining roles before a fair process has been followed to consult on the proposed restructure of the business, as well as the selection criteria.

If you want advice on how to develop adequate selection criteria to assist your business through a restructure, or you have any other concerns regarding your obligations under employment law and/or Health and Safety legislation, get in touch with the Lane Neave Employment Law team.