Good faith applies to any change that will or may possibly impact on the employment and/or work that an employee does. You do not have to share your thinking with your employees while you are in the consideration phase of what you may or may not need to do – this can add just as much if not more uncertainty and disruption to the workplace than is necessary. However, as soon as you have landed on a proposal of what you want to do – this is the time that you must commence consultation BEFORE you make any final decision.
You can of course consult prior to this but you may want to limit who you are including in your thinking stage and should be clear with them that, at this point, you have not made any decisions on whether or not to proceed, you are merely thinking about what you may need to do to take the business forward.
A restructuring that affects staff can be any of the following (note – this is neither an exclusive nor exhaustive list):
Once you have decided to make some change to your businesses structure, Step One is to document your proposal.
Step One: Document your proposal.
This should ideally include the following:
Brief overview of the change that is being proposed
Outline background information that is relevant to the current situation and change proposal
Provide information of any informal discussions or reviews that have been undertaken
Explain why the change is necessary – what happens if a change does not occur?
Provide any information (such as previous or current reviews or strategic documents) that provides an evidence/fact basis for the change
Describe the intended benefits of the change – ensure that any financial benefits are accurately defined.
State any link between the anticipated benefits and the objectives in your business plan
Include relevant financial information and provide a cost benefit analysis if the change is financially driven. Also include details regarding how the proposed change will ensure the financial viability of the Company – these must be factually based.
Provide details of the current state (e.g. organisational chart, service offerings etc)
Detail the specifics of what is being proposed and the potential impacts
Provide a revised organisational chart if relevant
Outline the strategies that will be adopted to reduce the impact on staff
Outline the process proposed for filling positions
Step 2: Consultation
Consultation involves informing those staff who are going to be directly affected by the proposal of what it is you are proposing and giving them a reasonable period of time to consider the proposal and provide any comment or feedback. This period of consultation is also used to answer any questions staff may have to gain clarity and understanding on what you are proposing and how it impacts them.
You should also inform staff who are not affected by the proposal, that a proposal is out for consultation and advise them to be cognisant of the impact this has on their colleagues.
We recommend allowing at least two weeks for consultation.
Consultation should begin with a briefing directly with those staff immediately affected.
This briefing is an opportunity to explain the proposal and rationale before providing affected staff with a copy of the proposal.
If your workplace is unionised, you should give the union a heads up prior to the staff briefing and invite them to be present to support their members.
You may also want to have some form of EAP support present or at least available for staff to contact, particularly if the proposal is about reducing staff numbers.
Be prepared to answer some general questions at the end of the briefing.
During the consultation period share the questions and answers you get with all affected staff – noting of course appropriate privacy and confidentiality issues.
Have a point of contact available for staff to speak to on a one-on-one basis if they have any questions.
You want to emphasis that this is a proposal only at this stage and you welcome feedback and input and depending on that feedback the proposal may or may not change. Inform staff that if the proposal changes significantly as a result of this feedback that a further period of consultation will occur.
Acknowledge all feedback as you receive it, and if it contains a question ensure you provide an answer to that question.
Step 3: Consideration of Feedback
Allow some time in your process to genuinely review the feedback you receive. If you get alternative suggestions, you need to give this feedback appropriate consideration and not simply discard it because it might differ from your proposal.
If necessary, re-model your proposal based on feedback to see if this gives you a better outcome.
Summarise the feedback and provide any appropriate comment on the feedback. Provide any rationale as to why you agree or disagree with any suggestion – this demonstrates that you have given ideas genuine consideration.
If, as a result of the feedback, you make significant changes to your proposal and this changes the impact on affected staff, you will need to provide a further, albeit shorter, period of consultation on the amended proposal. If this occurs, repeat Step 3 to get feedback on the amended proposal.
Step 4: Finalise Decision
Once you have completed the consultation and made a final decision, document the final decision. This can be in a similar format to the consultation document; however the difference now is you are confirming your final decision.
This step will include meeting with affected staff to inform them of the final decision. Again, if you have a unionised workforce, do not forget to include the union in this process as per Step 2.
After briefing affected staff on your decision, make a copy of the final decision available for them to take away.
Step 5: Implementation of Decision
Now that you have made your decision, the next step is to implement it. What this step involves will depend on what decision you have made.
You need to ensure you comply with any redundancy and notice period in your staff employment agreements and follow any restructure process in the employment agreement and/or any company policy when implementing your decision.
Step 6: Review of Restructure
An often-forgotten step in any restructure is a review of what you have done to ensure that the benefits outlined for undertaking the restructuring have been delivered upon.
This should ideally occur 3 to 6 months after the implementation has been completed and you may even consider a further review at the 12-month mark.
This review can help you identify and quantify that you have achieved the stated benefits and also learn any lessons from the process so that you can apply those to any future restructuring.
Involve staff, and where applicable, your union, in this review and communicate the results of the review to staff and stakeholders.
McKone Consultancy can provide you with both advice and/or guidance on your restructure proposal. We can also project manage your restructure from consultation through to implementation. Contact us today for a no obligation discussion of your needs.
Disclaimer: The information in this blog is provided as generic guidance and should not be treated as specific advice. Always seek professional advice to ensure any restructure you are considering is appropriate for your circumstances, including compliant with your employment agreements and any company policy.
[1] A full restructure proposal is not required if this is all you are doing – simply consult with the people whose reporting line you are proposing to change.
[2] Where such changes are due to the business undertaking a significant increase or decrease to it's hours of operation that will impact on a group of individuals. Individual changes to hours and/or pay are generally done though a variation, however where agreement cannot be reached restructuring becomes an option for the business.
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