Businesses undergo pressures from many directions; successful businesses bend, flex and grow to take advantage of the opportunities that such pressures create. One of the mechanisms businesses utilise to build in responsiveness and flexibility is evolving structures. The ability to move resources within the business, to where they will do the best, is imperative. When those resources are people, however, many businesses face self-doubt, concern and a staff perception. This weeks HR Highlight explores a case study of restructure and examines the requirements for redundancy and redeployment.
When a business is undergoing a restructure there is a requirement to consult with staff about the action the business is considering and to allow for comment from the staff to be considered prior to making any final decision about the structure or the particular impact on roles and staff. This consultation is required under the law.
While consultation is a requirement the business has the right to make decisions, on business grounds, about how the business will operate.
After consulting with staff, if the business then makes a decision that will impact on the employment of a staff member there are several obligations. The business must first explore all possible redeployment options and collate a list of appropriate redeployment options. A list of all available positions in the new structure should be made and each should be considered for “appropriateness”.
A redeployment of the same or similar salary, position, status, hours, location, skills etc would be considered to be appropriate. A redeployment that has significant differences may be offered and accepted at the request of the employee.
The business must then have a meeting with the employee (called with notice) to discuss the businesses decision regarding the current role and the next steps.
At this meeting, if there are appropriate redeployment options, they must be offered to the employee.
It is important to note when discussing the redeployment, it is important to discuss openly with the employee the options that were considered, and why they were considered appropriate or inappropriate for redeployment, as the employee’s own comments and circumstances must be considered. Businesses are reminded that a redeployment that has significant differences may be offered and accepted at the request of the employee. For example, the employee may be a full-time administrator and the new structure may only have casual task focused roles. Based on the employee’s life stage they may be ready to work fewer hours and may be interested in taking one of the casual positions.
If the employee agrees to an appropriate redeployment, then the employee transitions to that role and there is no other requirements. It is advised that this transition and its reasons be documented in writing.
If they reject the appropriate redeployment, then they are taken to have resigned (no redundancy payment applies). If the employee declines an appropriate redeployment then they have elected to withdraw their labour and resign. Before accepting such a stance from the employee it is important that the business clearly explain that by rejecting an appropriate redeployment the employee is NOT entitled to redundancy payments, as this may significantly impact the employee’s decision.
If there are no appropriate redeployment options then a redundancy payment will apply. The redundancy payment and notice is based on the employee’s age and length of service. At the meeting, the business should be ready to answer questions as to the nature of any redundancy and notice payment that will apply to each particular employee. It is also advisable to have on hand information as to the tax treatment of these payments.
Lastly, at the meeting it should be communicated if the employee is expected to work out the notice period or will be paid in lieu. If the employee is to work out the notice period, it is important to confirm and communicate the job search entitlement and notification procedures.
After the meeting the business should document the meeting in a letter outlining all of the important items; that there was a business need for restructure, that there was consultation on the restructure, that there was a decision to make the role redundant, that the tasks of the role are not needed anymore or are being done by other roles, that there was a meeting to discuss this, that at the meeting appropriate redeployment options were discussed, and the details of the outcome – either transition to new role, or redundancy payment, notice etc.
Here to Help
HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by calling 1300 160 270 and speaking to one of ACAPMA Employment Professionals its free for members. Click here to apply for ACAPMA membership.