With many NZ employers still grappling with adverse Covid-19-related economic and staffing issues, and if economists are to be believed, a recession on the horizon, employers may find themselves needing to restructure.
While redundancies can be an outcome of a restructure – that does not always have to be the case. Contrary to what you may expect, a restructure process should not be a “tick box” exercise either. The obligations in terms of good faith consultation and looking for outcomes short of redundancy are real – and so often overlooked where employers are fixated on the outcome and/or not taking legal advice. These employers also miss a trick – as with an open mind and expert guidance – creative solutions can be found which allow the employer to meet its needs, but without automatically leaping to redundancies (and so often, personal grievance claims as a result).
For any restructure, there needs to be a considered and well-documented rationale. It should have flexibility, and not be pre-determined. However, it also sets the scene for the process to follow. Again, taking advice at this early stage allows employers understand any loop-holes in the proposal, and any further information that ought to be provided to employees as part of consultation.
Then, the process. While there are a number of common steps for any restructure, a restructure should not be treated as a tick-box exercise on the journey to a predetermined outcome. It needs to be flexible to adapt to feedback and potentially ideas of achieving the outcomes needed, but in a different way. In short, one size does not fit all.
Taking a flexible approach with good communication can also assist to limit the impact on employees – again, a simple thing, but something we see overlooked all too often. Alongside recognising and looking after employees, it also limits the chances of personal grievances and other claims that could otherwise follow – particularly where difficult decisions are being made.
Disestablishing roles? Sometimes a headcount reduction is necessary. However, even in that situation, creativity can be a game-changer. Consider part-time roles – so many employees are increasingly keen to spend less time at work and more time “living life”. What about offering independent contracting on an as and when needed basis – to reduce fixed costs, but to retain skilled staff when the business requires. Again, we have seen individuals embrace that opportunity to set up their own business, but retain ties to the employer.
If redundancies are an outcome, what about extended or shortened notice periods, subject to what the parties need. Giving an employee an additional few weeks to find another role can be a huge benefit to them. Alternatively, agreeing to a payment in lieu of notice or a reduced notice period to allow them to secure a new role or look for new opportunities works well for others. Could you, in consultation with the employee, be assisting them to connect with contacts in the industry that may be looking for staff?
Honestly, the options are endless, and not hard or time-consuming to consider. A flexible process may sound more onerous than a “tick box” one with template documents a list of steps to follow. But, doing it “right” is likely to significantly reduce the risks associated with hurt and disgruntled staff, both in terms of potential legal claims (and costly remedies if they succeed), and organisational reputation.
Our team is passionate about understanding our clients, their needs, and supporting them through these processes, including limiting the risk when tough decisions need to be made. We can also assist with reducing risk where an employer has already commenced a “tick box” process and is seeing claims roll in, or wishing to look for ways to limit the impact on staff (emotional and/or financial).
For more information
If you/your organisation would like advice, please reach out. We would be happy to discuss. Feel free to contact us on 04 472 0020.
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