Restructuring: What Are Your Rights

Andrew Boast
09/04/2022
2
5 min read
Restructuring: What Are Your Rights explained by Employment Law Friend

Employers will sometimes decide to organise a restructure. Although this is often linked to a desire to reduce staff costs, and therefore impose redundancies, this is not always the case.

A restructure could be a part of an attempt to expand and recruit more widely, or it can be simply a reorganisation to improve service, or respond to a new development affecting the employer, with no change in staff numbers at all.

Should I be worried about restructuring?

There are no laws governing a restructure, but, there are laws governing redundancies, TUPE, contractual changes and others matters which will often arise during a restructure.

A planned restructure will normally begin with a business plan setting out the benefits – to the employer and their business – of the proposed changes over the existing model of working. Particularly with large employers there may be an attempt to engage employees, perhaps via union representatives, on these changes and how they might work in practice.

Can I be sacked if my company is restructuring?

If your employer is planning a restructure which will lead to redundancies then they need to follow the rules governing these, which set out minimum consultation periods, based primarily on the number of employees being made redundant.

Consultations should take place, both collectively with a union or employee representatives, as well as individually with anyone at risk of redundancy.

Can I be made redundant if my company is restructuring?

An employer is allowed to proceed with a restructure which you and others think is a terrible business idea, and that will not make any redundancies which follow unfair in law.

If later events prove you are right, there is nothing you can do about it. Ultimately, the law allows a business owner to run their business as they wish, and that includes making poor decisions, even when it causes redundancies.

It is only if the redundancy is “engineered” or “staged” that there will be some protection: a prime example of this is the case where a pregnant mother is alone “selected” for a redundancy there was no previous need for shortly after announcing her pregnancy.

A restructure should not have any effect on any employee facing disciplinary or capability processes with their employer. These will continue to take their usual course, although if they result in dismissal, then very often that person will not then be replaced, although that depends on the type of restructure the employer is proposing.

Similarly, for those with less than two years’ service, the employer can simply decide to dismiss at whim (or because of the restructure but without following any procedures) providing they give sufficient notice and the reason is not discriminatory.

In practice, especially with a large restructure, this tends to be unusual as the employer is more interested in getting the right people in the right roles than saving a small amount on redundancy payments.

Can I be demoted if my company is restructuring?

Assuming that you do keep a job, irrespective of whether others were made redundant, this may not be the same role or at the same grade as you had worked previously. Often changes are minor, and of limited importance, or it might result in a promotion, but it may be that you are offered a role at a lower grade and with a lower salary.

Often if this is the case, you could instead chose to take redundancy instead. It is really a question for you whether you would prefer to take redundancy (along with any redundancy entitlement), or to continue in employment but earning less.

When employees are restructured into more junior rules, this sometimes involves earning the same amount as before for a fixed period in the future, or being paid at the top of the pay band for the new role, to minimise any financial loss.

Can I sue my employer for restructuring?

Most legal claims arise in two different ways:

    1
    First, from people who are selected for redundancy, in circumstances they consider to be unfair, and who bring a claim for unfair dismissal arising from this.
    2
    Secondly, from people who are restructured into more junior roles, in circumstances which they consider to be unfair, perhaps because they take issue with how their skills were graded or with the fact they were not offered training that others gained.

The main difficulty with such legal claims is that because there is an ongoing employment contract (or there was an offer of one) financial compensation can be limited. In some circumstances a change in position will be enough to bring a claim of constructive dismissal.

Any such claim will be particularly strengthened if the new roles comes with a lower salary, because that would be seen as a major breach of contract by the employer.

Alternatively, it might be appropriate (but only if the restructure reduced the overall headcount) to argue that there was a redundancy situation and you were in fact redundant, and entitled to a redundancy payment. The difficulty with both of these is that they do involve you leaving your employment.

Is your employer planning on restructuring?

This can be a stressful time for employees. If your employer is not acting in accordance with the law regarding redundancies, dismissals or demotions, contact us to see how we can help.

Employment Law Specialist | Competitive Quotes | Straight Talking Legal Support

This content is provided free of charge for information purposes only. It does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of our company. For employment law advice please get in contact and speak to your employment law solicitors.
 
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