Businesses will commonly “restructure” or “reorganize” their workplaces to account for changes in the marketplace to try to remain competitive. These changes can be quite broad and may include consolidation of certain departments or areas of the company to improve efficiency, employee layoffs or job cuts to reduce staff and save on costs or even simply a change the employment or management structure of the company.
In employment law, company “restructuring” or “reorganization” will often lead to claims from employees of these businesses who have had their employment affected by these changes.
Possible claims can include:
- Wrongful Dismissal. Wrongful dismissal or wrongful termination occurs when the employee’s job has been terminated without reasonable notice of termination. If the employee has been wrongfully terminated, they may be entitled to compensation.
- Constructive Dismissal. Constructive dismissal occurs when the employee’s fundamental terms of employment are unilaterally changed by the employer. These changes to the fundamental terms of employment must be serious such that it would be unreasonable for the employee to stay or to accept these changes. The crux of virtually every constructive dismissal case is that an employer makes or intends to make a substantial change to the employee’s terms of employment without the employee’s consent. Changes that are too small or that are made to less important terms of employment will not trigger constructive dismissal.
The risk that an employer may be on the hook for a constructive dismissal claim by an employee is particularly heightened during a period of reorganization or restructuring as the whole point of the restructuring is to change the workplace. For example, changes to an employee’s job duties or responsibilities, changes to the employee’s pay, increase or decreases in workloads, demotions, or transfers to a new work location or workplace may all result in a constructive dismissal claim by an employee depending on the circumstances.
- Human Right Claims. Human rights claims can occur when the employer makes discriminatory decisions based on an employee’s gender, race, age or disability when they are restricting or reorganizing.
Can employers mitigate the risks of possible claims from their employees?
Yes. There are steps that the employer can take to try to limit the risk possible claims made against them by their employees during periods of restructuring or reorganization.
For example, employers should ensure that they comply of all applicable statutory standards. If those standards are not followed, then the employee may be in a position to make a claim against the employe such as a wrongful dismissal claim.
The employer should not significantly alter or change the terms of the employment contract even in times of reorganisation as doing so can lead to a claim for constructive dismissal by the employee.
How can Zeilikman Law help?
Zeilikman Law can help both employees and employers during a workplace reorganization or restructuring period.
An employment lawyer can help employers ensure that they are compliant with employment statutory standards and can assist in preparing and reviewing termination letters and packages as well as help negotiate disputes and assist reaching resolutions. Further, if a claim cannot be avoided, employment lawyers can represent an employer’s interests in the course of a legal proceeding with the business’ best interests in mind.
Employment lawyers are also crucial for employees who are facing a restructuring at the workplace, particularly when the employee has experienced a lay off or termination. An employee should not hesitate to bring their termination letter and / or package including a severance package to a qualified employment lawyer for their review. The employment lawyer can indicate to the employee if their proposed compensation is adequate taking into account the employee’s age, length of service and position.
