SafeWork NSW and the High Court Are Reshaping Redundancy. Are You Ready?

Many of us watched with interest as SafeWork NSW issued a prohibition notice to pause a proposed restructure at UTS. The unprecedented regulator’s intervention followed an anonymous complaint suggesting the restructure posed psychological harm to workers and that the consultation process was deficient. The notice has since been lifted, with SafeWork reportedly satisfied by adjustments made to how communications would be delivered especially to those impacted, including staff with changed reporting lines.

As someone who’s led restructures internally and advised on them externally, I can say this with confidence: restructures are never just operational, they’re deeply challenging for all your people.

HR professionals are often on the front line in back to back meetings, delivering the news and absorbing the emotional responses like fear, anger, anxiety, shock, and the gut-wrenching stories that follow. On the other side are employees who, through no fault of their own, are suddenly facing a fundamental change to their livelihood. Even those who remain may experience changes to their roles, teams, or resources.

The psychosocial risks in a restructure are multi-faceted, and like most psychosocial hazards, they’re complex.

What feels respectful and fair to one person may feel frustrating or insincere to another. There’s possibly never a one size fits all approach that will suffice. I’ve seen employees want extended consultation.  I’ve seen others want to leave the day of the announcement. Some go on leave. Some don’t attend the consultation meeting at all. Some want to be heard on how the business could be redesigned. Others challenge why their role was selected and not someone else’s.

Can we really eliminate psychosocial risk in a restructure?

Short answer is no – but we can minimise it.

For me, it starts with how we communicate. Respect will best be shown through thoughtfulness and planning. No one wants to learn their job is at risk via a botched email blunder and a subsequent apology, nor do they want to learn about it on Aussie Corporate. We can control and plan, our delivery, our timing, our communication and what support we have in place.

Planning has never been more important, particularly where we also have regard to the recent High Court decision in the Helensburgh Coal Case which ultimately confirmed that in a restructure, employers must consider redeployment opportunities arising not only from existing vacancies but also whether roles could be created by insourcing work currently done by contractors. The Court found that the Fair Work Commission was right to assess whether those employees could have reasonably been redeployed into contractor roles, even if that meant changing operational arrangements. That said, they were clear that redeploying one person at the expense of another person would be a “grave step” and would be unlikely to be considered a “reasonable outcome“.

In this economic climate, restructures are prevalent and predominantly financially driven, often necessary for long-term viability. Just last week alone we saw the announcement that ANZ will cut 3,500 roles, NAB will cut 410 and Bendigo Bank 158 roles, and that’s just what’s been published!

It’s never been more important to rethink your process before implementation.

A delay caused by SafeWork NSW intervention or the Fair Work Commission can not only increase costs of the restructure itself, but it can also create more uncertainty and angst for all people involved. Leave aside the reputational damage.

A restructure process requires input from your people and safety leaders to design restructures that are safe, humane and legally sound.

If you need help designing a process that manages your compliance obligations as they traverse both Fair Work and Safety obligations, from start to finish, please contact Melini Pillay, Principal within the McCabes Employment group.