HR advice

Business restructuring

Are you considering a business restructure? Make sure you follow proper process, says Master Plumbers HR Manager Lisa Duston.

With the economic impacts of COVID-19 being felt by many New Zealand businesses, I am receiving calls on how best to manage a restructure process for a business needing to reduce its headcount. An HR guidance document on businesses restructuring is available in the member log-in of the Master Plumbers website, and it is always good to have a discussion on this before starting the process to ensure you have all your ducks in a row.

Redundancy is a result of an employer’s decision that a position is surplus to the employer’s commercial needs. Employers must be able to justify that redundancies are genuine and show that a fair process was followed. Following a fair process will benefit the organisation and its employees—those staying and those that, unfortunately, may need to leave.

Any employer who fails to carry out a proper restructuring process will potentially be liable for remedies, such as compensation, penalties, lost remuneration and reinstatement. 1. Document the business case and reasons for restructuring, and have supporting evidence. 2. Document your restructure proposal.

This needs to be well thought out and completed before starting the process. 3. Make sure the redundancy proposal is centred on sound business reasons and those reasons are clearly articulated to those affected. 4.Ensure redundancy selection criteria are

rational, clearly explained and consulted on. Employers must apply a clear and transparent period of consultation, which is fair and legal for both parties. 5. Ensure the process and decision-making is compliant with the procedures and criteria set out in any employment agreement or company policy. 6. Give every affected employee a proper opportunity to give feedback on the proposal before any decision is made.

Consider employee feedback carefully.

There might be another option you haven’t considered.

Check out the HR guidance resources available in the member area of the Master Plumbers website (under HR Support), or call Lisa on the HR Helpline to discuss.

About the author: Lisa Duston is HR Manager at Master Plumbers. Lisa offers HR advice to Master Plumbers’ members at competitive rates (first 30 minutes free). Contact Lisa on 021 245 1704 or email lduston@masterplumbers.org.nz

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