The Housing Sector, like other sectors, is constantly changing and company restructuring can be driven by a need for change in the organisational structure or by the necessity to make financial adjustments. Frequently it involves both and companies restructure for a variety of reasons:
- To reduce costs
- To concentrate on key products or accounts
- To incorporate new technology
- To make better use of talent
- To improve competitive advantage
- To spin off a subsidiary company
- To merge with another company
- To decrease or consolidate debt
As a manager, often working in close proximity with colleagues, a restructure which may lead to redundancies is an extremely difficult process to go through. As a leader in a difficult economic climate with reduced budgets and higher expectations it’s essential that a clear vision for the future can be shared with staff at the outset in the form of a business case which identifies the reasons for the restructure and the intended outcomes. Linking individual’s and teams’ goals to organisational targets can help staff to see where they fit into the new structure.
Some HR Advice for Leaders
As a leader it’s important to remain aware throughout the process that every individual goes through different emotions when faced with change – from hearing the news right through to coming to terms with the after effects. This journey, as described by JM Fisher, typically involves feeling:
- Anxiety – can I cope?
- Happiness – at last something is going to change!
- Fear – what impact will the change have on me?
- Threat – the problem is bigger than I thought
- Guilt – are the past failings down to me?
- Disillusionment – this is not for me so I’m leaving
- Acceptance – maybe things won’t be so bad
- Excitement – I’m looking forward to the challenge
As a result of the above and the potential legal implications of getting it wrong, it’s important to consider alternatives to compulsory redundancy.
At FusionHR we guide you through the process but if you’re going it alone, as a minimum we advise wherever possible to document that you have:
- Reviewed recruitment plans including the use of temporary or fixed term posts
- Considered voluntary redundancies
- Offered voluntary transfer of staff into other suitable posts within the organisation
- Offered voluntary transfer to part-time working or job share arrangements or voluntary change in hours of work
- Considered the possibility of early retirement
It’s important to think about what documentation you need to have in place before raising the possibility of a restructure. Prepare your business case and a proposed timeline. Ensure job descriptions or role competencies are in place and up to date. Without them it’s increasingly difficult to assimilate to new posts identified within the proposed structure through either an interview or assimilation process. Selection criteria to be used as part of the process must not be discriminatory or contravene the Equality Act 2010.
Finally, if there’s no alternative to redundancy it’s important to know the following:
- Redundancy pay (including any severance pay) under £30,000 isn’t taxable
- Statutory redundancy – length of service is capped at 20 years and weekly pay is capped at £475
- The maximum amount of statutory redundancy pay is £14,250
- Any outstanding wages and holiday pay must be paid and is taxable
- Ensure staff receive contractual notice as per their contract of employment
A settlement agreement can be an alternative to compulsory redundancy and can be proposed at any stage of an employment relationship. Parties should be given a reasonable period of time to consider the proposed settlement agreement. It is important that employers follow a fair process, as well as the other principles set out in the ACAS Discipline and Grievance Code of Practice, because, if the employee is subsequently dismissed, failure to do so could constitute grounds for a claim of unfair dismissal.
If you need any assistance with any part of a restructure please get in touch. We can help with Job Descriptions and Pay Reviews right through to trade union consultation, staff consultation meetings and ensure redundancy procedures are followed. To speak to one of our HR Advisors, call 01924 827869 or email [email protected]
