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The restructuring process can be one of the most challenging management tasks you have to perform in your business. When you are changing the structure of your teams and the nature of your employees’ roles, it can be a stressful and tense period for your staff. This is especially the case if you are cutting certain roles or jobs. It is important to follow best practices to try to make the restructuring process as smooth and painless as possible for your business.

This article sets out three tips for doing so. They include:

  • making sure to focus on roles rather than people; 
  • succeeding in the first meeting with your affected team; and 
  • remembering the particular legal rules for redeployment and downsizing in New Zealand.

Focus on Roles – Not People

The focus in your restructure proposal, which you should put in writing to your team and affected staff, must be on roles – not people. This saying refers to the key concept that restructures are about changing the way your business works, not about zeroing in on weak performers and making them redundant. If the latter point is the justification for the restructure, this is not a genuine reason for a restructure. Likewise, a poor performance process is the right (and fair) process to use instead. 

This is a commonly misunderstood concept as your employees may be worried about their job security. It is important not to reinforce these concerns by referring to specific people in your communications and proposal, particularly early on. Naming and shaming can undermine the idea that your restructure is about business change. Instead, focus on why the business needs to change and what the new structure will look like. More so, detail how roles will change, not the people in those roles. 

Tip: stay high level, particularly when first introducing the idea of a restructure to your staff.

Informing Your Team About a Restructure Proposal

The first meeting where you discuss the restructuring proposal can be challenging, particularly given the nerves and tension that some of your employees may be feeling. Consequently, you should do as much as you can to offer support to your employees before, during, and after this meeting. You should include everyone in the meeting whose roles might be affected by the restructuring. It is best practice to err on the side of being inclusive rather than exclusive. 

You should also allow everyone the option to bring a representative or support person to the meeting. You should not (informally or otherwise) caution employees against doing so, both because this is against your legal responsibilities as an employer and because your employees may really need the support. 

Be Careful With Redeployment and Downsizing

While redeployment and downsizing are sometimes critical parts of a proposed restructure, you must be very careful when planning these. Ideally, you should seek expert advice. This is because employment law in New Zealand sets out specific rules for how you can legitimately redeploy people and how downsizing will work when you reduce the number of a type of role. You have to follow a fair and reasonable process when doing so.

For example, you may currently have four people working in one role as a sales assistant. However, you wish to downsize to having just two people working that role. In this case, there needs to be a thorough process for selecting the two employees that will remain in the business. Accordingly, you will need to detail selection criteria to show that there will be a fair process to downsizing. This is technical and can be fraught with difficulty, and employees can challenge this process. Consider seeking legal advice if this is part of a restructure you are considering for your own business. 

Key Takeaways

Restructures are tough to get right. There are lots of employment rules and laws to be aware of. You also need to ensure that you treat your employees fairly and include them in the process. There are some best practices in terms of doing this. You need to focus the proposal on roles, not people, and communicate this clearly to employees. Additionally, you should make sure employees have the support they need at meetings. Most importantly, you should be very careful when redeploying and downsizing – it is always advisable to get specialist advice when doing those processes. If you want to know more about the restructuring process and how to make this process as smooth and minimally disruptive as possible, contact LegalVision’s business lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions

What does it mean to focus on roles rather than people?

Restructures are all about changing your business structure. This means that the proposal and changes need to centre on the roles in your business rather than the people who work in them. Inevitably, some people may be affected by the role restructure. However, the emphasis in your proposal and communications must be on the roles – not on the need to make certain people redundant. This can be a breach of employment law.

Can employees bring support people to meetings about a restructure?

Yes, they can. As an employer, you should remind them in correspondence that they have this option should they want to do so. They may also want to bring a representative, and this is also acceptable.

Do you need to consult with employees when doing a restructure that affects them?

Yes, you do. This is part of your good faith responsibility as an employer, and you also have a responsibility to genuinely listen to the feedback that your employees give you in response.

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