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Serious insight for serious situations.

Serious insight for serious situations.

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If you think reorganizing your workplace is as easy as the PM’s most recent cabinet shuffle, think again!

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This week’s ministerial cabinet shuffle got me thinking about workplace changes and the risks associated with them.  From time to time employers feel the need to make significant personnel changes in their workplace which can include revising the duties, titles, and pay structure for some of their employees. While the business may dictate such a need, the “shuffle” may lead to legal issues.

The most prevalent concern is that of constructive dismissal as a result of an employer unilaterally making one or more significant changes to the terms and conditions of an employee’s employment. For example, a demotion or change in job title might, in some circumstances, be tantamount to a dismissal and trigger the payout of significant funds to an employee.  How does an employer avoid the constructive dismissal risk?  Well, there are several ways that changes can be implemented successfully and they include:

  1. Incorporating a provision into an employee’s employment contract that permits an employer to make reasonable changes without the employee’s consent. Experienced legal counsel can assist with drafting the appropriate language.
  2. Obtaining the employee’s written consent prior to making the change.
  3.  In situations where the employee does not consent and where the change is considered to be a fundamental one, the employer should provide the employee with advance working notice of the termination of their current position. The period of working notice should be equal to the applicable termination notice exposure assessed in the situation. Termination notice exposure is something that an employment lawyer can assist the company in determining. Then, the employee should be offered new employment, with appropriate consideration, effective immediately after the termination date on the new terms and conditions of employment.  This exercise is not without risk and so employers should seek the advice of employment counsel prior to engaging in it.

So, before you “shuffle”, give thought not only to how the changes could improve your business, but also think about how to ensure that you obtain a favourable employee reaction to them.

Patrizia Piccolo