Restructuring: what to consider/what it entails
What is restructuring?
When does restructuring take place?
Restructuring will most likely take place in cases of operational changes, for example a change in structure (ownership, management, or departments), goals and vision, financial position (the economy, amended legislation impacting on the cost of doing business, entry of competitors into the market, the minimum wage, recent drought, etc.) and technology (progress in terms of new techniques and methods of completing tasks quicker, as well as technological inventions).
Follow the correct procedure
Section 189 of the Labour Relations Act specifies a strict procedure that employers must follow when considering restructuring and/or retrenchment. Employers must take care to follow this procedure and avoid making any unilateral changes to the employment contract.
Restructuring is a formal consultation process that allows both parties to engage in discussions to consider other alternatives, minimise changes, establish timeframes and reduce the negative impact of restructuring. The employer should in all good faith keep an open mind throughout the process and seriously consider proposals put forward by employees. Meetings should be held with all possibly affected employees as well as the trade union where applicable.
Employers should also take note of training as a means to avoid retrenchment. Where an existing or new position requires a higher performance level or new skills, the employer is obliged to consider any additional training that may assist the employee in achieving the level of performance required.
Communication is key
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