Companies typically must restructure or change roles on account of modifications in enterprise technique, value discount programmes, function redundancy, and mergers/acquisitions. On this information, we’ll clarify the important components of restructuring and function modifications for employers, together with the important thing legal guidelines, the rights of workers, the redundancy course of, and the implications of TUPE.
‘Restructuring’ refers to modifications within the organisation of a enterprise, typically with a view to creating it function extra effectively, cost-effective and/or efficient. Companies restructure for a lot of causes, together with to vary enterprise mannequin or technique, get monetary savings, transfer into new markets, or on account of a merger with or acquisition of one other enterprise.
Enterprise restructuring could imply that some workers have to be made redundant or transferred to a newly acquired enterprise. It’s crucial that employers observe the right authorized processes at every step of the best way to keep away from reputational harm and/or a declare for wrongful, unfair, or constructive dismissal by an worker if their employment rights have been breached.
Any failure to stick to the legislation and finest follow when restructuring and altering roles may also result in impaired workforce morale, lowered productiveness, the lack of precious crew members, elevated office stress, and even commerce union motion.
No, you can’t change the phrases of an worker’s contract with out their settlement to take action. It is because an employment settlement is a legally binding contract signed by each events and as such, modifications can’t be imposed by one occasion over the opposite.
Various an worker’s contract of employment
If you wish to change the phrases of an worker’s contract, for instance, to scale back or improve their working hours, you might must:
- Suggest a change and have this agreed upon by your worker
- Renegotiate the phrases of a commerce union’ collective settlement’ or
- Train a flexibility or variation clause inside the present employment contract, which can assist you to make a change. For instance, the contract could embrace a flexibility clause that enables the employer to range the workplace the worker works from or the working hours. Even when a flexibility clause exists, it’s at all times beneficial to seek the advice of with the worker earlier than imposing the change. This may be sure that they’ve the possibility to debate any considerations and be comfy with the brand new association. Not doing so could consequence within the worker feeling pissed off with the change being imposed on them.
The important thing level right here is that you have to get an settlement to range the phrases and circumstances of employment earlier than any change is made that will have an effect on the rights of staff. Altering the phrases and circumstances of employment provides a terrific alternative to debate any considerations with the worker and to deal with these earlier than finalising the brand new preparations.
Dismissal and rehire
It’s not doable to achieve an amicable settlement on any proposed function modifications. Different choices could also be obtainable to you, together with rehiring the worker on a brand new contract with revised phrases (‘dismissal and rehire’) or giving them discover of any proposed modifications. In the event you determine to dismiss and rehire on a revised contract, it’s important that you simply observe the right course of, together with:
- Guarantee that you’ve got a good motive for dismissal (e.g. redundancy or a considerable motive corresponding to monetary points or lack of every other possibility)
- Comply with a good dismissal process (e.g. the redundancy course of)
- Present ample discover
- Present the worker with the appropriate of attraction towards their dismissal
It’s essential to ‘collectively seek the advice of’ for those who intend to dismiss and rehire 20 or extra workers at a single location and inside a interval of 90 days or much less. The session course of ought to purpose to keep away from or scale back the variety of dismissals and restrict the detrimental penalties of the dismissals. Failure to collectively seek the advice of could lead to compensation being ordered within the type of a ‘protecting award’ by an employment tribunal.
If you’re not sure of the right course of to observe to dismiss and rehire, it is suggested that you simply observe the Division of Enterprise and Commerce’s Code of Apply on dismissal and re-engagement in accordance with the Commerce Union and Labour Relations (Consolidation) Act 1992. Not following this code of follow could lead to any award being elevated by as much as 25%.
Generally, restructuring necessitates redundancy. This may occasionally occur, for instance, if, as a result of a change in enterprise technique, some roles are now not required. Earlier than contemplating redundancy, it is very important verify whether it is wanted. Different choices could embrace:
- Providing voluntary redundancy
- Providing different roles in different elements of the organisation or
- Halting the employment of recent workers.
When you’ve got concluded that redundancy is required and that the choice of voluntary redundancy isn’t appropriate or taken up, it’s advisable to create a redundancy plan setting the choices thought-about and the steps you’ll observe to make sure a good course of. Redundancy is usually a prolonged course of, together with:
- Advising workers of the chance of redundancies, what number of roles could also be affected, and what’s going to occur subsequent
- Write to any workers who’re susceptible to redundancy, explaining that they’re susceptible to redundancy and their choices
- Holding consultations with workers concerning the proposed modifications, how you can scale back the impression of the proposals, any considerations raised, and the choice standards for redundancies
- Choose workers to be made redundant utilizing a good choice system
- Work out a redundancy pay bundle
- Give applicable discover to these being made redundant
- Provide different employment whether it is doable to take action
- Provide an appeals course of and
- Assist your workers via the method.
Keep in mind, if you don’t observe a good and full course of for redundancy, any workers made redundant might be able to make a profitable declare to the Employment Tribunal for unfair dismissal. This may occasionally then have severe popularity and monetary and authorized implications in your organisation.
If you’re contemplating redundancy, we advocate following the most effective follow course of set out by ACAS. This explains every little thing it is advisable to find out about worker rights throughout redundancy, how you can make workers redundancies, collective session for redundancy, redundancy safety for being pregnant and new dad and mom, and TUPE. TUPE (or the Switch of Undertakings (Safety of Employment) rules) offers workers the appropriate to continuity of employment if they’re transferred to a brand new employer (e.g. as a part of an acquisition or merger). Continuity of employment means present workers have the appropriate to have the identical or comparable contractual phrases following the switch course of.
