What is workplace restructuring?

What is workplace restructuring?

Due to the challenges over the past few years with the development of COVID-19, the war in the Ukraine, the anticipating global recession, and the increase in inflation rates; many companies have been struggling with their finances. These factors all affect the current operations of businesses and could result in essential restructuring and an increase in employee layoffs.

Workplace restructuring is when, based on the current external and internal factors, a company decides to make changes that often affect their employees. These changes can include hiring more employees or terminating current employees, changing work duties, merging work duties, downsizing, merging with another company, etc. Each of these changes directly impacts employees and their contracts. For example, if an employee’s work role is modified, it would impact the terms and conditions of their Employment Agreement.

Restructuring is a complex undertaking, one with many legal regulations that must be followed to avoid legal charges and lawsuits filed by previous or current employees. Before even beginning the process, the employer must have clear and reasonable grounds when beginning the restructuring process to avoid liabilities. Even further, for each change an employer needs, there is a legal procedure to follow to avoid damages. As per the example above, when an employer wants to modify an employee’s role, they must receive the consent of the employee, provide proper notice, or follow the defined terms of their original contract. If the employer fails to follow the proper legal process to making contractual changes, they could face constructive dismissal charges.

In addition to constructive dismissal claims, the employer must be careful when they terminate employees because if not executed properly, it can cause wrongful dismissal charges. Even though the employer may be terminating many employees, the employer must be thorough with each individual contract. The employer is responsible for providing the proper termination notice or pay in lieu of notice, and severance pay.

When undergoing mass terminations, employers must not discriminate and terminate workers based on their race, ethnicity, sex, gender, physical or mental disabilities, age, religion, etc. Even though there are many necessary terminations to be made, it does not mean that recognition about who they are individually is insignificant.

For these reasons, therefore, seeking legal help is extremely important when making any alterations to your company. There is always a proper legal methodology to follow when a company needs to adjust, because one change can affect many other internal variables.

If you are an employer who needs to restructure their workplace, please contact KCY at LAW by filling in an online consultation request or contact us by phone at 905-639-0999 to book your consultation today.