In the Weekend NZ Herald, 4 July 2020, HR Associate provided advice for businesses who may need to go through a restructure due to Covid-19, and subsequently make jobs redundant. If you didn’t get a chance to read this article, we’ve provided an overview of the key points below:
Proposal timing
While there is no defined time frame for consultation under employment law (it’s all about being fair and reasonable) we recommend 7 days minimum as good practice. For example, you might present the proposal on a Tuesday, and close consultation the following Tuesday.
Allow people time over a weekend, so they can discuss with family.
Aim to present the proposal midweek, rather than on a Friday, otherwise people don’t get to ask questions for a couple of days/over the weekend.
Two days might have been an acceptable consultation period during lockdown, but it’s not sufficient in regular circumstances.
Be specific with your reasons
It’s not enough to blame Covid-19 for the restructure/redundancies, so it’s important to provide specific data. For example, percentage figures on how much revenue has fallen.
Being specific satisfies legal requirements, while also allowing staff to fully understand the situation, and they may accept it more easily.
Consultation process tips
Allow people to provide feedback in different ways, such as via email or in person.
Your people can be a great source of ideas - they may come up with innovative ways to reduce redundancies, such as taking a collective paycut, reducing their hours, or they may have ideas for making revenue in other ways. Taking on this feedback can be valuable.
Always give people the opportunity to bring a support person (or representative) to meetings about the situation.
If the proposal changes vastly during the consultation process, you may need to undertake further consultation.
Aim to provide a fair and transparent process - even if people are made redundant, if your people feel it was a good process, it will make the situation much easier on everyone. Once the business grows again, you might want to rehire staff, or at least you’ll have a reputation for being a good employer, which makes recruitment easier in the future. Your current and past staff members are your best advocates.
Get advice
It can be a tough time for business owners to go through a restructuring process, particularly when the business might be on the line, so it can be helpful to reach out for professional, objective, independent advice. If you need assistance, please do get in touch and we can discuss how HR Associate can make the process easier, and reduce financial (i.e. costly personal grievances) and reputation risk.
This information is general guidance only, and you should not solely rely on this information; specific advice should be sought for your situation.