Forecast: Change Likely

The weather affects us in many ways – right down to how we should manage our employees

There are many around the country, indeed, around the world, who might well be justified in saying haven’t we endured enough? With natural disasters like floods, earthquakes and tornados mounting, our strength and resilience is being tested.

Although you may not live in areas directly affected by these trials, New Zealand is such a small country that it is likely that the effects have reached you in some peripheral way. It may be due to the six degrees of separation and the fact that you know someone living in the disaster area. However, many businesses are experiencing a downturn in sales as people take a conservative approach in these uncertain times.

While the weather and the seasons do their own thing without the need to consult anyone, employers don’t have the same option. Instead, as an employer, you consider the need to make changes to an employee’s terms and conditions (such as hours of work, location of work or remuneration). Such changes require the employee’s agreement.

Let’s say you run a business in a region that is more popular in the summer months and during holidays, such as a beach town. With another winter looming, you’re predicting a downturn in operations and considering whether you need to downsize your staff or find other ways to reduce your costs to ensure your business survives the winter. This could be achieved in a number of ways.

One option is to propose a restructuring and the redundancy of certain positions. Depending on the structure of your organisation, you may be able to identify unique positions and propose the redundancy of those, or downsize a number of same or similar positions. The key points to remember with a proposed restructuring and redundancy situation are:
- you must consult with potentially affected employees about any proposal (including providing them with all information that is relevant to the proposal)
- these employees are entitled to a reasonable opportunity to provide feedback in response to a proposal which may impact on their continued employment before any final decisions are made
- once you have made your decision (after considering the feedback) you then need to make sure that you comply with any contractual obligations in terms of notice, redeployment, retraining, compensation, etc.

Another option is to seek to negotiate an agreed variation of terms and conditions with employees, as an alternative to a possible restructuring or redundancy. For example, you might agree with the employee that their hours of work are reduced from five days per week to four days per week. This could be for an agreed period of time, or on an ongoing basis. In this situation, the agreement of the employee is required, which is beyond the obligation to consult.

I find the following a useful thing to bear in mind when considering these sorts of processes: would I be happy if my son/daughter/mother/father/husband/wife were treated in this way? By that I mean, when considering the process you propose to follow, and assessing whether you think it is fair, a good litmus test is how would you feel if anyone associated with you was treated the same way? If you would think it fair, chances are the process you are proposing is reasonable and one that you will be able to explain and justify in the event that it is challenged.

On the positive side, many employers are experiencing reasonable reactions from employees when such changes are being proposed as necessary changes. Although it won’t always be the case, a number of employees appear to be taking the view that an altered/reduced job is better than no job at all in the current climate. On the comparative downside, employees facing financial pressure may be more likely to challenge decisions which do not favour them, but if your process is fair and reasonable, your discontent this winter should be limited.

Bridget Smith
www.sbmlegal.co.nz