When a business restructures, employers have a duty to consult with affected employees before making any final decisions. A well-run consultation process not only ensures legal compliance but also fosters fairness, transparency, and trust.
So, what does a good consultation process look like?
Genuine Consultation – Not Just a Box-Ticking Exercise
Consultation must be real and meaningful. This means that an employer must approach the process with an open mind and genuinely consider feedback before making decisions. If a business has already decided to make roles redundant before consulting, the process is flawed from the outset.
Key indicators of genuine consultation:
Employees are presented with a proposal, not a predetermined decision.
The employer is willing to listen and open to alternatives.
Feedback is actively sought, considered, and responded to.
Providing Sufficient Information
For employees to meaningfully engage in consultation, they need to understand what is happening and why. The employer must provide clear, relevant, and comprehensive information about:
The reason for the restructure – e.g., financial difficulties, efficiency improvements, or market changes.
The proposed changes – including how they impact roles and responsibilities.
The selection criteria – if roles are being disestablished or employees are being redeployed.
Timeframes – for consultation, decision-making, and potential redundancies.
Employees should receive this information in writing, typically in the form of a consultation document. This ensures clarity and reduces misunderstandings.
Allowing a Reasonable Opportunity to Respond
Once the proposal is shared with employees, they must be given enough time to think about it and provide feedback. Good practice includes:
Holding meetings to discuss the proposal and answer questions.
Offering employees the opportunity to provide written feedback.
Allowing employees to bring a support person or legal representative to discussions.
Considering Feedback in Good Faith
Consultation is pointless if feedback is ignored. Employers must genuinely consider employee responses and demonstrate that they have taken the feedback on board. This means:
Reviewing suggestions for alternative solutions (e.g., reducing hours instead of redundancy).
Responding to concerns and explaining decisions.
Being transparent about how feedback influenced the final outcome.
If no changes are made following consultation, the employer should clearly explain why.
Ensuring Fair and Transparent Decision-Making
After consultation closes, decisions should be made fairly and objectively. If roles are being made redundant, the process must be free from bias, with clear, fair selection criteria. Employees must also be informed of their rights, including:
Redeployment opportunities within the business.
Support available
The right to challenge the decision through a personal grievance if the process was flawed.
Understanding your rights during the consultation period of a restructure is important. If you’re facing being made redundant and are unsure whether the process is fair, ask for help from an expert. mathewswalker.co.nz | 0800 612 355
Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal advice. While we strive to keep the information accurate and up to date, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. For specific legal advice tailored to your situation, please contact a qualified legal professional.
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