Workplace restructuring is a common occurrence, as businesses must adapt to economic changes, technological advancements, and shifting market demands.
While restructuring can lead to role changes, redeployment, or redundancies, employees are protected under the Employment Relations Act 2000, which ensures fair treatment throughout these processes.
Understanding your employee rights during a restructuring can help you navigate the situation with clarity, and confidence!
In this article, we’ll explain what restructuring involves, your legal protections, and the steps you can take if your role is affected.
What is Workplace Restructuring?
Workplace restructuring occurs when an employer reorganises their business to improve efficiency, reduce costs, or respond to market changes. This can result in:
Role Changes: Alterations to job responsibilities, leadership, or work hours.
Redeployment: Moving employees into different roles within the organisation.
Redundancy: The elimination of positions that are no longer required.
It’s important to note that restructuring is about roles, not individuals. An employee can not be made redundant to dismiss them for performance or personal reasons.
What should a Fair Restructuring Process look like?
A fair restructuring process typically involves the following steps:
Proposal Stage: The employer presents a written proposal outlining the reasons for restructuring, the roles affected, and potential outcomes.
Consultation Stage: Employees are given a reasonable amount of time to review the proposal, seek advice, and provide feedback.
Consideration Stage: The employer must carefully consider employee feedback before making final decisions.
Decision Stage: The employer communicates the final decision and outlines next steps, such as role changes, redeployment, or redundancy.
Failure to follow these steps can result in the finding of an unjustified dismissal if an employee challenges the process.
Additionally, good faith must be adhered to. As per the Employment Relations Act, good faith requires employers to provide employees with all relevant information related to the continuation of their employment. If this is not provided, then the employee has a valid grievance.
Employee Rights During Restructuring
New Zealand law ensures employees are treated fairly, and consulted properly during restructuring. Your key rights include:
1. Right to a Fair Process
Employers must provide clear, written information about the restructuring proposal.
Example: “Our company has faced financial challenges over the past year, with revenue declining by 15%. To ensure the company remains sustainable, we have conducted a review of all departments. This review identified areas where we can improve efficiency, therefore, we are proposing to reorganise the marketing team.”
Employees must have an opportunity to provide feedback before any decisions are made.
Example: “I understand the company’s need to cut costs, but I believe my role could be adjusted to include social media management and customer engagement, reducing the need for outsourcing. This would allow the company to maintain its brand presence while still saving money.”
The employer must genuinely consider employee feedback before finalising changes.
Example: “This is still a proposal, and we want to hear your thoughts. We will consider all feedback before making a final decision in two weeks.”
2. Right to Redundancy Consultation
If redundancy is proposed, the employer must:
Explain why the restructuring is necessary.
Example: “With a smaller marketing budget, the company has decided to prioritise revenue-generating activities such as direct sales. Unfortunately, this means that your position as the Marketing Coordinator is proposed for disestablishment.”
Share how decisions about affected roles will be made.
Example: “Before making this decision, we will consider alternative options, including redeployment and process changes.
Explore options for redeployment within the company.
Example: “We understand that this is difficult news, and we are here to support you through this process. If the proposal proceeds, we will provide guidance on potential redeployment opportunities and offer career transition support to help you with your next steps.”
3. Right to Support
Employees can seek support from:
- A union representative.
- An employment relations specialist.
- A support person during consultation meetings.
What if you’re made Redundant?
If redundancy occurs after a fair process, employees should receive:
Notice of Redundancy: In line with the employment agreement.
Final Pay: This includes any outstanding wages, holiday pay, and redundancy compensation (if specified in the contract).
Support for Transition: Some employers offer career counselling, outplacement services, or reference letters.
If you believe the redundancy was unfair or not genuine, you can:
Mediation: Mediation involves bringing in an independent party (mediator) to resolve disputes without going to court. Employment New Zealand offers free mediation services to resolve disputes.
Raise a Personal Grievance: This must be done within 90 days of the redundancy notice.
Seek Advice: If internal mediation is unsuccessful, an employment relations specialist inform you of your rights, investigate, and recommend solutions.
Conclusion
Workplace restructuring can be a challenging experience, but as an employee, you have strong legal protections to ensure fair treatment. Understanding your rights, seeking advice, and participating actively in the consultation process can help you navigate restructuring effectively. Good luck!
Mahi Law can Help!
Our expert team will help you understand your employment rights, and pursue resolution (including compensation) through various channels, such as: Without prejudice negotiations, mediation, the Employment Relations Authority, or Employment Court if required.
We also work on a no-win, no-fee basis – if we win your case, your employer covers the costs.
Get in touch for a free consultation!
You can fill out this form – or contact us at admin@mahilaw.nz, or 0800 450 032.
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