Implementing a business reorganisation—employment issues
Produced in partnership with Jane Fielding, Partner of Gowling WLG
Implementing a business reorganisation—employment issues

The following Employment guidance note Produced in partnership with Jane Fielding, Partner of Gowling WLG provides comprehensive and up to date legal information covering:

  • Implementing a business reorganisation—employment issues
  • Initial considerations
  • Whether the re-structure gives rise to a redundancy situation
  • Whether dismissals will be for 'some other substantial reason' (SOSR)
  • How the employer will defend claims relating to the dismissals
  • Whether collective consultation obligations are triggered
  • Changes to terms and conditions of employment
  • Whether there is a TUPE transfer as part of the reorganisation
  • Collective redundancy consultation and TUPE consultation: dealing with the overlap in practice
  • Keeping proposals under review

A number of employment law issues arise when a business wants to implement a reorganisation. Those issues are both legal and practical and this Practice Note considers both aspects, as well as how to manage the interaction between the various issues. This note assumes that the business continues to exist in the same location but under a different structure, rather than being closed down or moving site, where redundancy will be the primary consideration (for which see Practice Note: Definition of redundancy).

In practice, businesses will often take calculated risks on short-cutting the relevant legal processes, perhaps to save time or by a degree of reverse engineering to achieve a desired outcome. However, this note assumes that the business wishes to do its best to take a legally compliant approach, while explaining the legal and employee relations risks of adopting a different approach.

Initial considerations

The exercise should be approached from the start as one that may be subject to legal challenge. This means that until the point a final decision has been taken on the new structure (following appropriate consultation—see Whether collective consultation obligations are triggered below), all documents created for the purposes of planning the re-structure should be marked draft and at a point in the process where a proposal has been reached, they should be marked 'subject to