What is Restructuring?
Restructuring involves reconfiguring business operations, job roles, or departments to optimise performance or cut costs. Employers must ensure that these changes are driven by genuine business needs and supported by clear, documented reasoning.
Redundancy as a Last Resort
Redundancy should be considered only after other options have been thoroughly explored, such as role changes or redeployment. It’s essential that redundancy is not used to address performance issues or in retaliation for disputes, as doing so could lead to unjustified dismissal claims.
Key Steps in Handling Redundancy
- Define the Proposal: Clearly articulate the reasons for the restructuring and any redundancies.
- Consultation: Employers must provide employees with relevant information and give them an opportunity to respond. Open and transparent dialogue is critical at this stage.
- Review Feedback: Take employee feedback into account and adjust the proposal where appropriate.
- Communicate the Final Decision: Once the decision is finalised, inform employees in a respectful and clear manner.
- Offer Redeployment or Alternatives: If redundancy is unavoidable, employers should explore redeployment or retraining options to minimise job losses.
Avoiding Common Pitfalls
- Predetermination: Ensure that decisions are not made prior to consulting employees.
- Ambiguity: Provide clear and thorough explanations of the rationale and process to avoid confusion or disputes.
- Using Redundancy for Non-Business Reasons: Redundancy should be based solely on business needs, not performance or unrelated issues.
- Disregarding Alternatives: Before implementing redundancies, all reasonable alternatives should be thoroughly considered.
Legal Risks and Personal Grievances
Employees who feel they have been made redundant unfairly may raise a personal grievance. Redundancy must be handled in accordance with the Employment Relations Act 2000, and employers must ensure compliance with any contractual agreements to avoid legal disputes. Failing to follow the correct procedures can lead to claims of unjustified dismissal or constructive dismissal.
Compliance is Key
Ensuring compliance with both the law and your own company policies is critical. Employers should document every stage of the restructuring and redundancy process, ensuring that decisions are fair, transparent, and legally sound.
Conclusion
Restructuring is a difficult process that, when handled properly, can offer a business the chance to refocus and improve operations. By ensuring transparency, fairness, and adherence to legal requirements, employers can reduce the risk of personal grievances and maintain a positive working relationship with their employees.
