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Support for your business

Redundancy and Reorganisation

As your business grows (or shrinks), you may decide that the original structure you chose for your business needs to change in order to ensure the future prosperity of the business. This can take the form of merging and/or acquiring a new company, reallocating and reorganising staff, or amending the benefits and shares options for staff.

Where these decisions need to be taken, our Employment Team works with their clients to mitigate the associated risk and to identify the options that will enable them to best achieve their commercial goals; be that growth or the reduction in the resource the business requires. 

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Consulting with Staff

If you are considering making changes to your business that will affect your employees’ employment status, you must consult with them about the changes before they are implemented. Examples of typical changes include:

  • Changes to terms and conditions of employment;
  • Reorganisations and restructures;
  • Redundancies;
  • A sale of the business; or
  • Transfer of service provisions (including TUPE requirements)

While some reorganisations can be positive for employees, others can mean significant changes, including redundancies. For this reason, consultation should be started with the intention of minimising the effect that the restructuring has on employees. If the proposal is to make 20 or more redundancies within a 90-day period, then additional consultation requirements should be followed.

If proper consultation procedures are not followed, a business could be exposed to Employment Tribunal claims and significant financial liability.

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Restructuring

Employers often find that the business structure they began with is no longer appropriate or fit for purpose as their business grows.  Often, staffing resources need to be restructured and/or reallocated/re-assigned in order to support a business’ continued growth. Employers should look at realigning the needs of the business with the skills and strengths of its employees.

Redundancy

There are three reasons for redundancy:

  • The employer has a reduced requirement for a particular type of work;
  • The employer is no longer continuing with the business (or a part of it); or
  • The employer is not continuing work at a particular location.

Employees should only be considered for redundancy if one of the above qualifying circumstances are met. An employer should also consider alternatives to redundancy (and should take on board comments and suggestions from affected employees).

Employers should always seek to minimise the number of job losses and to do so, they may consider such proposals as restricting recruitment, allowing contracts with consultants to end, or removing overtime opportunities. A nimble and creative approach is often beneficial in terms of risk and cost management. Equally, employers should look to find alternative jobs within their own organisation, to redeploy individuals, throughout the redundancy process. If these are not feasible, other options may include considering voluntary redundancy and/or reducing working hours for some employees (with their agreement only).

Redundancies can be a stressful and difficult time for employees. Emotions often run high, understandably. Employers should therefore approach the process with caution and compassion.

Our Employment Team has significant experience in advising employers throughout the process, with clients ranging from independent businesses to SMEs and large-scale corporations. We tailor our advice to suit our clients' business needs, always commercially focussed and full of practical advice to help you achieve your strategic objectives.

Whether you want to reorganise your business to make it fit for purpose or you have to make employees redundant, our Employment Team can guide you through the process with objectivity.

 

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