COVID-19 has caused many employers to consider making changes within their business. If you are a business owner who needs to downsize, or re-align to new market conditions, there’s an important process you need to follow if those changes have the potential to impact an employee’s employment, and while there’s a lot at stake for you, it’s just as important to consider the employee.
Plan and prepare:
Before embarking on any proposed changes, you should describe the genuine business reasons for the change in a clear and transparent manner. Even as a result of COVID-19, an employer needs to be able to describe the specific reason for the change, the problem you are trying to fix, and the outcomes you are hoping to achieve.
Develop a proposal:
The next step is to develop the proposal for change. Depending on the extent of the change, this could be in the form of an individual letter or a more comprehensive change proposal document. This should clearly describe the change being proposed, provide the potentially affected employees with access to information relevant to the proposed changes, and clearly set out how the employee(s) will be affected by
the change. The proposal should also set out the timeframes, how the employee can provide feedback and any support you will offer. If new positions are being proposed, or there is a reduction in the number of employees who hold the same position, you will need to clearly outline the proposed selection criteria for those positions.
Under the Employment Relations Act an employer is required
to consult with employees potentially affected by the proposed change, and allow them the opportunity to provide feedback on the proposal. Feedback could include any alternatives to the changes proposed.
Ideally, you should meet with each affected employee. This is an important discussion, so if you feel a bit nervous, prepare a script and follow that. Employees also find these discussions difficult and potentially upsetting, so should always be given the opportunity to have a support person or representative present.
Employees should then be given sufficient time to consider the proposal, seek independent advice if necessary, and provide
feedback on the proposal. There’s no fixed timeframe, but I generally recommend a minimum of five business days.
Once you have received the feedback, it’s important that you consider that feedback carefully, or any alternatives suggested. Often employees provide viable alternatives that you may not have considered or thought acceptable to the employee such as job sharing or reduced hours. You don’t have to accept everyone’s feedback or suggestions, but it’s important to show you have considered it.
Making the decision:
Once the consultation period is over and all feedback considered, the employer must decide what the final decision will look like. The final decision needs to be conveyed in person to each employee.
If an outcome is that an employee’s position is to be disestablished, you must comply with the terms and conditions of their employment agreement in regards to any redundancy entitlements or notice provisions. It’s also important to consider any opportunities for redeployment within the business.
Don’t undermine your brand:
While it’s important to get the process right from a legal perspective, it is also important to get the process right from
a humane perspective. Demonstrating genuine empathy during meetings, treating employee’s with respect and dignity, taking the time to meet individually with affected employees, being aware of the employee’s emotional state and being
able to respond appropriately to that, offering support or outplacement, allowing time off to attend job interviews or
to talk to professional advisors, considering requests for shortened or extended notice periods – all make this a better process for both the employee and the employer.
Businesses often spend years building their employer brand and recruiting the right people, don’t undo all that good work and good will by cutting corners through the change process.
This article deals with complex legal issues. If you are considering change management or restructuring, please seek specialist advice first.