Case Law: Restructuring and Redundancy Guidance

 A Fair and Reasonable Process: Getting Restructuring Right 

The still very challenging economic environment has highlighted the importance of ensuring employers follow a fair and reasonable process when initiating a Restructure Proposal that could lead to positions being disestablished. Have an open mind to feedback from and reasonable time for feedback from potentially affected staff and get independent legal advice. Have a sound business rationale for a Restructure Proposal backed up by specific figures and data such as revenue trends, fall in profitability and rising costs. 

The follow key points to considered when carrying out a Restructuring are as follows

• Invite staff to attend meeting letter on Proposed Restructuring 

• Present Restructuring as a proposal for change

• Outline reasons/rationale for proposed change

• List details of proposed change e.g., due to need to achieve cost savings

• Explain selection and recruitment criteria if role(s) are being disestablished 

• Consider retraining and redeployment as alternatives to redundancy

• Provide timetable and opportunity for staff feedback. Allow minimum 7-10 working days

• Advise right to get independent legal support

• Indicate who feedback on proposal is to go to, who they can direct questions to, form of feedback e.g., email and by what date 

• Meet with affected employees to provide report back on staff feedback and confirm proposal or modified proposal

Our Restructuring and Redundancy toolkit is available at a special price of $400 plus GST for members if purchased during the next month. Click here.

Members can access advice and guides from Business Canterbury in these areas to reduce risk in this area. Contact us for specialist advice at hradvice@businesscanterbury.co.nz.

For further information or queries around this, please contact Michael Prisk at michaelp@cecc.org.nz if you need advice in this area.

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