Restructuring and redundancy
Restructuring can be driven by a number of factors including responding to economic pressures, changes in the marketplace, a business decision to sell or contract out, or product and service changes.
What you must do
- You are legally required to consult with your staff.
- You must observe any restructuring policies, or terms contained in the applicable collective or individual employment agreements.
- Act in good faith and ensure the restructure is genuine and fair.
- You need to follow a special process for specified groups of ‘vulnerable’ employees, such as certain cleaning, food catering, laundry, orderly, and caretaking employees. Follow the link for more information.
What you could do
- If you are considering restructuring your business, there are three suggested stages of introducing a restructuring plan with affected staff: consultation, implementation and resolution.
- Be open to the views and suggestions of your staff. In some instances they may come up with creative solutions that you had not thought of.
Redundancy
Redundancy is when a position is no longer required by the employer. It can be unpleasant for you and the affected employees, so it’s important that you give the decision serious thought and be fair about the whole process.
What you must do
- Have a genuine business reason for the redundancy. It is the position itself that is redundant and should have nothing to do with the employee who is filling that position.
- Consult with the affected employees. Give them access to relevant information about why the position is redundant and an opportunity to comment before a final decision is made.
- Follow the redundancy process outlined in your employment agreement. Compensation is generally not a legal requirement unless you have included it in the employment agreement.
- Follow a genuine and fair process. This includes giving as much advance warning of a redundancy proposal as possible, keeping an open mind about alternatives to redundancy, and offering counselling and career advice services.
- You must not make someone redundant and then offer a new or existing employee essentially the same position or responsibility.
If an employee believes that they were made redundant for reasons that were not genuine or that the redundancy process was unfair, they can challenge it by raising a personal grievance.
What you could do
- Consider alternatives to redundancy.
- You could chose to pay out your employee’s notice period instead of requiring them to work so they can use that time to search for another job and attend interviews.
- You and your employee can agree to redundancy compensation if it is not already provided in their employment agreement.
- Follow the redundancy process flowchart below to ensure your reasons are acceptable.
Figure: Restructuring and Redundancy process
