An employer can make changes to an employee’s terms and conditions of employment and role, but there is a legal obligation to act in good faith when doing so and consult with the employee involved. This means in practice being honest, open, and not acting in a misleading or deceptive manner in doing so.
Consultation will be required where the employee’s role and/or terms and conditions of employment is proposed to be significantly changed.
These requirements extend to restructuring situations, including where redundancy may be the outcome. Before confirming changes, the employer has a legal obligation to consult in good faith with the employee.
For a redundancy, the employer should implement a fair proposal process, that allows the employee to provide feedback on the proposal, and the employer should genuinely consider any specific feedback provided and respond accordingly.
As part of the proposal process, the employer should provide the business rationale for the change proposed to the employee and set out a timetable for the consultation period. The rationale stated should be accurate and able to be confirmed with relevant supporting information provided to the employee.
In the event the employer proposes to reduce numbers of the same role, with an existing role(s) to remain, there should be a selection criteria process that is adopted to confirm the employee who will be selected for redundancy.
It is important that the employer follows the terms of the employee’s employment agreement that cover restructuring and redundancy. This would include notice periods for termination for redundancy and whether the employee is entitled to redundancy compensation. Some employment agreements have provisions that define redundancy, the process to be adopted, and selection criteria to be used.
A sound restructuring process should allow the employee an opportunity to have support or representation involved and to seek independent advice on the proposal.
Alternatives to redundancy should be considered by the employer, such as redeployment to an alternative role. Any reasonable support that can be provided to the employee to support them with the change can be offered such as EAP counselling and job application support.
An employer who does not implement a fair and reasonable restructuring process is at risk of a successful personal grievance claim in the event the outcome is challenged by the employee involved.
The obligation of good faith applies to employees as well during these processes. Any feedback the employee wishes to make should be provided during the restructuring process so this can be considered and responded to by the employer.
Change in the workplace can be stressful for all involved and the process required can vary depending on the scale of the restructuring involved. MKER is available to provide commonsense advice and assistance for those navigating this process.