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Alternatives to Redundancy

Published 01 Oct 2009

9 day fortnight / Job Support Scheme

The Job Support Scheme is designed to help employees keep their jobs in this challenging economic climate.
It provides an allowance to supplement the income of employees who have agreed to reduced hours at work. The allowance is available for up to six months.
Employers need to negotiate an agreement with their employees, and unions where appropriate, which reduces their hours by up to 10 hours per fortnight. The aim is to encourage businesses to keep employees on reduced hours rather than make them redundant. It also provides job security to employees while they take part in the scheme.

Who can get it?

Employers in New Zealand who have 50 or more staff who have:
  • negotiated an agreement for a maximum period of six months with employees (and unions where appropriate) that temporarily varies the existing employment agreement(s) of employees participating in the Job Support Scheme
  • reduce the hours of participating employees by up to 10 hours a fortnight but not so they work less than 30 hours a week
  • not make any participating employee redundant
  • agree to pay the allowances they get (less tax and levies) to participating employees
  • can confirm that the shift to reduced hours is only expected to be a temporary measure
  • can confirm that participating employees are New Zealand citizens, permanent residents or have valid work permits.
  • Only employees who were working 37.5 hours or more per week before agreeing to reduced hours can get the allowance.
Who can't get it? NOT:
  • Employers with fewer than 50 employees
  • central and local government
  • incorporated and unincorporated societies and associations
  • charitable trusts
  • all education institutions
  • district health boards
  • Local Authority Trading Enterprises and State Owned Enterprises, except in individual circumstances where exclusion would lead to an unfair commercial situation (for example if a direct competitor was using the Job Support Scheme).
How much is it?

$12.50 per hour (the adult minimum wage) for each participating employee, for up to five hours a fortnight.

For more information:
0800 778 008 - DOL Employer Line - - search for Job Support Scheme

Flexible working

Check out your employment agreement:-
  1. are you entitled to change the employees hours of work, or working arrangements?
  2. You are not entitled to impose fundamental changes to an employee's terms and conditions.
  3. The employment agreement may provide for flexibility, for e.g. some agreements contain a clause whereby the employer can impose a reduction in hours due to a downturn.
Pay reductions

  1. You will not be able to impose a pay reduction; this will need to by agreement.
  2. Pay includes all aspects of remuneration - so you will not be able to swap the SS Commodore, for a Smartcar, if the Commodore was part of the terms and conditions or remove extras such as medical insurance or re write the commission payments unless the employee agrees.
  3. You may need to present the employees with the complete picture - a voluntary reduction in pay may avoid the need to impose compulsory redundancies.
  4. Employers often need all / the majority of the work force to agree to achieve the necessary may make their agreement conditional upon everyone else agreeing (and then the burden is equally shared).
  5. The reduction will normally be on a temporary basis, for a fixed period of time, with pay rates resuming their original levels, unless a further agreement to decrease is reached.
  6. You need to prepare a written variation to the employment agreement (this can be in the form of a letter if you prefer) , advise the employee that they are entitled to take legal advice on the document, and get them to sign it.
Pay postponement

An agreed reduction in immediate pay with the remainder to be paid on terms later - only with the employee's consent and with a written variation to the employment agreement

Negotiate Alternative rewards?

Offering shares in the business?
Only with the employee's consent and there would need to be a variation of the employment agreement.