It’s well known that the cost of living has increased post pandemic and businesses are not immune to these impacts.  This is article 2 of our series of articles on redundancy.

In this article we look at planning for a restructure.

The first critical step in planning and preparing a restructure is to get HR advice early. It is also a good idea to obtain legal advice, we are not just saying that because we are lawyers, genuinely it is a good idea when undertaking a restructure to obtain legal advice.

When planning a restructure, it is important to consider:

  • Knowing what the goals and strategies of the organisation are;
  • Identify the reason(s) for the goals of the restructure e.g. are they economically driven or is it about improving the organisations capability or is it due to a downturn in work;;
  • Identify the leaders for the restructure – identify what each of them will do and establish accountability for each leader;
  • Ensure the organisation has protocols in place about creation of documents and communication. Confidentiality must be maintained and everything recording in writing;
  • Clearly identify the proposed change(s) and be in a position to articulate the goals and rationale for the change(s). It is essential that this is determined before any steps are taken in the redundancy process.
  • Obtain legal advice on whether there are any matters to be addressed before you do what is proposed to ensure there are no legal issues or restrictions on the proposal;
  • Establish a team to manage the project with clear guidelines regarding authority;
  • Identify when consultation should occur – do the changes involve significant or substantial change requiring consultation.  This will involve a thorough understanding of all consultation provisions in industrial instruments, contracts and policies and procedures;
  • Determine who will be affected by the restructure and therefore who must be consulted.  Remember this is not just the individuals whose roles are identified as excess to requirements, it is all the employees affected, for example if a role is identified as excess to requirements with the duties of the role being distributed amongst other employees those employees are affected and should be consulted;
  • Identify all stakeholders and what is to be communicated to those stakeholders;
  • Prepare a consultation document setting out all necessary information about the restructure. The consultation document may be used as a guide for the discussions/consultation with those affected by the restructure.  Check lists are a good idea too;
  • Prepare an implementation plan and communicate that plan to employees;
  • Undertake a careful review of financial information required to justify the restructure. Ensure the information used is accurate and relevant;
  • Implement a fair selection criterion for the retrenchments;
  • Ensure you have a contingency plan for each step of the project.

Once you have carried out the above, the next step is Consultation. Stay tuned for our next article on consultation.

If you have any questions about redundancy, please contact us.

Written by Kate Barter and Nicole Dunn


Disclaimer: This publication has been provided for general guidance only and does not constitute professional legal advice. You should obtain professional legal advice before acting on information contained in this article.