A restructure is a legal process, not just a business decision
While restructuring is often discussed in terms of efficiency, cost, or strategy, it is critical to understand that any change that affects people’s roles, hours, or employment status must follow a lawful process.
Under New Zealand employment law, employers must:
1. Have a genuine business reason for the proposed change2. Consult with affected employees before decisions are made3. Provide relevant information so employees can meaningfully respond
4. Genuinely consider feedback with an open mind
5. Consider reasonable alternatives, including redeployment, where available
Skipping or rushing any of these steps significantly increases legal risk. One of the biggest pitfalls: treating consultation as communication Clear communication is important, but consultation is more than keeping people informed.
Consultation means:
1. Sharing the proposal before it is final2. Explaining what is changing and why3. Giving people a real opportunity to respond
4. Being prepared to change your approach based on feedback
If a decision is already made, or feedback is not genuinely considered, the process is unlikely to meet good faith requirements.
Pace matters, but speed cannot override fairness
Businesses often feel pressure to move quickly during change. However, rushing a restructure is one of the most common causes of personal grievance claims.
A fair process usually involves:
1. Allowing reasonable time for employees to seek advice and provide feedback
2. Carefully assessing individual circumstances
3. Checking assumptions and financial data
4. Ensuring consistency across impacted roles
A clear timetable helps manage expectations, but it must still allow enough time for meaningful consultation.
Redeployment and alternatives must be considered
Even where a business reason for change is genuine, employers are expected to consider reasonable alternatives to redundancy where they exist.
This includes:
1. Looking for suitable alternative roles within the organisation
2. Considering whether changes to duties or hours could avoid disestablishment
3. Applying any selection process fairly where fewer roles remain
Failing to actively consider alternatives is a common and costly mistake.
Culture and trust still matter
How a restructure is handled has a lasting impact on trust, engagement, and reputation. Employees who feel excluded, rushed, or dismissed during change are far more likely to disengage or challenge the process.
A transparent and respectful approach, even in difficult circumstances, supports better outcomes for both the business and its people.
After the change
Once a restructure is implemented, it’s important to review how the new structure is working. This is not about revisiting the decision, but about ensuring the business is achieving the outcomes it set out to achieve and addressing any unintended issues early.
A final word
Even small restructures carry legal risk. If a change affects one role, one person, or one team, the same principles still apply.
Getting advice early can help you:
1. Design a defensible process2. Avoid unnecessary disputes
3. Protect your people and your business
Handled well, a restructure can support long-term sustainability. Handled poorly, it can create significant legal, financial, and reputational damage.
