Restructuring

Restructuring can be a stressful time for all parties involved – including Employers - especially as Christmas approaches. So what do you need to know before you start a restructure or redundancy process?

Previously the Employment Court has been reluctant to make a decision on whether a company had a valid business reason for making a position redundant, preferring to comment on whether a fair process had been followed, but there have been a couple of recent cases that indicate that this is changing.

The Employment Court decision in the Grace Team Accounting Ltd v Brake case has indicated that cases will be judged on whether what occurred was what a “ fair and reasonable employer could have done ” and this will include whether the information being used in the decision making had been carefully assessed to ensure accuracy and relevancy.

Before embarking on a restructure you must ensure that your reasoning is valid and is to do with the position itself rather than the person currently filling it. All your rationale must be backed by valid costings and business reasons that you can provide.

A fair process must be followed, and if you are asking people to apply for a reduced number of positions then a robust selection process needs to be put in place. This helps ensure that decisions are made for the right reasons and allows everyone involved to be treated fairly and equally.

Communication is the key to a successful restructuring process; keeping people informed of timeframes and decision dates and ensure these are kept (or any changes communicated in advance).

Obviously there will be some sensitive information which you don’t want to share with the whole team, especially ones who may be leaving the business, but giving as much detail as possible will help to ensure that the process is open and transparent.

Our experience is that as the end of the year approaches many employers decide they want to make changes so they are ready to commence the new year with “a clean slate”.

If you are considering changes please discuss them with us now and don’t leave them until close to Christmas as that does not place the company in a good light.

Remember that any changes within your business are discussed by your employees with their family and friends and on occasions on social media.

You want any changes to be a good PR exercise.

Sometimes it is easier to have someone who is external to the business look at your options with a fresh pair of eyes. That is where we can help so, if you have any questions about a process you have started, or have an idea in mind for how you may be able to structure your business better, please give us a call and allow us to help you.