The employer’s guide to restructure and redundancy. Part 6: managing redundancy

In part six of our series on compliantly proceeding with a restructure and a redundancy, we look at how to decide who gets to stay…

In selecting who is an affected employee, if a role changes by less than about 20 per cent (in matters such as job content, seniority, and pay/benefits) it’s regarded as being unchanged (relatively speaking) and the person in that role can be confirmed into the new role automatically if they want it. Other candidates would not have an equal chance at that role. Where a role changes by more than 20 per cent, it’s regarded as being substantially changed. This means that a sole incumbent of a single such role, may be offered the role, but where there are two or more people in similar roles, a selection process will have to be employed to select those who should remain.

The selection process

This selection process should have been included in the original proposal, and there may already be agreement on a fair selection criteria and process. If there isn’t, then among the objective criteria for selecting should be:

• Length of service;
• Appropriate qualifications and skills;
• Level of multiskilling and adaptability;
• Willingness to accept changes to location or skills;
• Annual performance appraisals (formal ones); and
• The employee’s disciplinary, performance and safety record.

The focus should always be on who to retain, not who to terminate. For a selection process to be in good faith, it should seek to retain excellence and competence, with the unavoidable consequence that some will be excluded by their track record or lack of suitable skills. Seeking to retain the best employees is not the same thing – not “the opposite side of the same coin” – as seeking to dismiss mediocrity and incompetence, and thereby retain the best.

Selection should always actively avoid potentially discriminatory selection criteria, such as pregnancy where the employee is about to go on parental leave, race, nationality, gender, religion, or even absence from work owing to domestic violence, bereavement, sick or carers leave.

In the final part of this series, we’ll look at different ways you can effectively and sensitively communicate with your employees, depending on how they’re affected by your restructure.

If this article has raised any questions or concerns or you’d like to learn more about how we can help your business, please reach out to our workplace relations experts via our 24/7 HR Advice Line.