Major change (or restructuring and reorganising) can be one of the most uncomfortable HR processes, but it’s also one of the most straightforward, if you do it well.
At its core, restructuring is a 3-step process:
- Preparation: Document legitimate reasons for undertaking major change and justify the business case for the restructuring.
- Consultation: Hold meetings and provide affected employees with all relevant information pertaining to the restructure.
- Implementation: Proceed with major change, following sound process every step of the way.
Fundamentally, restructuring/reorganisation is a consultation process centred around the work being done in the business and which roles are performing which tasks. It is about change to get the right structural fit for the company’s objectives. It’s not about the people in the roles, or a way to get rid of employees you don’t want or like.
Getting the process right will enable you to make the necessary changes smoothly, without opening yourself up to too much legal risk.
Major change can involve a single role or many roles – the process for Australian businesses is largely the same, only the scale varies.
It starts with a proposal to make changes to the organisation’s structure, individual roles, or responsibilities, based on a genuine commercial justification. Once you have made a definite decision to make changes, you must consult with every individual who will be or who may be affected by the proposed changes.
Be aware that restructures can be highly stressful for everyone involved. If you make the process as painless as possible, people will be able to move on with their lives, and the team that remains (including the employer) can get on with things.
The restructuring process
There are 8 main stages in a restructure.
1. Preparation
Preparing the information that you’ll present to your employees is key.
You are telling them a story that has to make business sense. Make sure you have a solid commercial reason for the changes, e.g. you are resizing because of a decrease in revenue or a shift in the company’s focus.
Also ensure you are giving people all the information they need to understand the proposal and give feedback, especially if you are relying on financial arguments for the change(s).
This includes information on why you’ve chosen specific roles for change and how the changes will roll out.
When does the obligation to consult begin?
Modern awards contain consultation clauses that require employers to consult with employees (and their representatives) as soon as possible after deciding to make significant workplace changes, e.g. different working hours, duties, work locations or redundancies. You are not required to consult with employees until you have made a decision, rather than proposing changes to employees during any early consideration period.
If you're proposing redundancy of 15 or more employees, you must notify or consult with a union and you also have to give Services Australia written notification of the proposed redundancies.
Be sure to also check any terms in enterprise agreements, employment contracts and workplace policies that lay out details of consultation requirements.
2. First meeting with employees: The proposal
The initial meeting with workers is all about communicating the proposed changes.
You can choose to meet with affected members as a team or as individuals. It makes no difference legally but we strongly advise meeting with affected individuals first, before a team meeting. If jobs are on the line, it’s much more considerate to let people know privately.
Once individual meetings are held, then hold a team meeting and include employees not affected by the proposed changes, so that they can be aware that their colleagues are going through a tough time and to be sensitive.
Present the case for changes (and the supporting information), the details of the changes, and explain the overall restructure and reorganisation.
Make sure each employee has this information so they can take it away to digest and prepare their response. This is usually in the form of a letter, but it can be an email.
Be as kind as possible and allow plenty of time for questions. Your team members may well be shocked and upset.
3. Employee’s consideration period
Allow employees time to go through the information and prepare a response.
Anything up to 2 weeks is considered reasonable, but it all depends on the scale of the changes and how urgently the business needs to make them.
We recommend giving 2 working days (e.g. first meeting Monday morning, second meeting Wednesday morning) as a starter, but if any employees ask for more time, you should consider giving it to them.
4. Second meeting: Employee’s feedback
Like a disciplinary process, this is the chance for employee(s) to give their side of the story.
Keep an open mind. Your people may present information you haven’t considered.
Unless your employees are part of a union, meet with them individually. They may have suggestions or ideas which negatively affect their colleagues, or they may be very upset and shaken by the process.
5. Employer’s consideration period
By law, you must fairly take the employees’ feedback into consideration.
It may be that they have identified a flaw in the proposal or an option you hadn’t considered. We have seen plenty of instances of an employee coming up with a new idea that results in the original restructure proposal changing, or the business deciding not to restructure after all.
If you choose to continue with the original proposal, you need to be able to justify why.
6. Third meeting: your decision
Meet with the affected employees individually and present your decision on the restructure and how their feedback was considered. While you have the right to make the final decision on how to manage your business, your decision on the changes must be fair and reasonable and you need to be able to prove it.
Confirm the changes to roles and/or responsibilities, and the timeframes.
If redeployment is an option or new roles are available, this is when you present those options to your employees.
You will also have to deal with fallout from affected people, so be prepared, and be kind.
7. Implementation
Rolling out the changes can take time, depending on their scale.
If you are making people redundant, they will have a notice period to work out (or be paid out in lieu of notice).
Other employees may be moving into new roles or have new responsibilities. You may also be working through applicants for other available roles.
8. Survivor management
The last stage is all about looking after the people who remain with the business. The restructuring process is unsettling and team members may have lost colleagues who are their friends.
It is important to be sympathetic to the impacts on people. You need to ensure you provide time and resources to support those 'survivors' and work on rebuilding team culture. You may also be dealing with bringing new employees onboard at the same time.
This step is easy to miss but it is crucial to getting your team up to speed again quickly!
Be prepared for issues
As we all know, things don’t always run as smoothly as we’d like. People can ask for more information or more time to consider the proposal. People can dig their heels in and try to slow the process down.
Good advice will mean you are prepared with alternative plans and responses, if anything arises.
What is vs. what is not considered major change
Not every change you propose making to the business is legally considered “major”. This table compares what scenarios do and don’t constitute major change and why.
| Scenario / change | Likely “major change” | Why it leans this way | Consultation duty (high level) |
| Closing a site or function; significant restructure that removes teams or many roles | Yes | Classic “major change” with significant effects (job losses, workforce size/composition). | Must consult after a definite decision but before implementation; disclose reasons, impacts, mitigation; consider feedback. |
| Redundancies that materially affect the business (e.g., double-digit % of headcount, or critical roles) | Usually yes | Effects likely “significant” (terminations, changed composition/operation). Context matters (scale, roles, flow-on effects). | Same as above; also test for genuine redundancy and redeployment obligations. |
Enterprise-wide tech change altering duties/skills (e.g., automation) |
Usually yes | Change to “technology… in relation to the enterprise” with likely significant effects on duties/skills. | Consult; provide info on nature, timing, measures to avert/minimise adverse effects. |
| Major roster or ordinary hours changes across a workforce | Yes (separate trigger) | Awards/agreements require consultation on regular roster/ordinary hours changes even apart from “major change”. | Provide details; invite and consider views (incl. family/caring impacts). See: fwc.gov.au. |
| Targeted restructure with limited redundancies where flow-on effects are minimal | Often no | Courts have found not every restructure is “major”; look at proportion affected, role seniority, integration, consequences for others, hours context. | Still best practice to engage; “major change” clause may not be triggered if effects aren’t significant. |
| Reallocation of tasks between existing roles with little/no change to duties, hours, location, or opportunities | Often no | Effects on employees may be minor; not a significant effect in the model term sense. | No formal “major change” duty, but consult if any award/EA clause for specific change applies. See: AustLII |
| Operational review that commits to a program likely to reduce standalone positions (even if staged) | Can be yes | A commitment to changes (e.g., voluntary redundancies) can itself amount to “major change” likely to have significant effects in the future. | Consult once the decision is definite, even if impact is medium-term. See: JFM Law |
| Moving a few employees between teams without changes to hours, pay, or duties | Usually no | Limited scope/impact; unlikely “significant effect”. | Consider local consultation duties (e.g., roster/ordinary hours if affected). |
|
Minor performance-neutral title changes or reporting-line tweaks |
Usually no |
No substantive effect on employment conditions/opportunities. |
Good-faith comms recommended; formal “major change” duty unlikely. |
|
Large-scale changes to weekend/night staffing pattern |
Often yes (hours trigger) |
Regular roster/ordinary hours consultation obligations are triggered; scope/impact can also make it “major change.” |
Provide information, invite views, consider impacts before implementing. |
Common restructuring mistakes
There is always the potential to make mistakes. Some of the common ones we see are:
- Not having a genuine justification for the restructure.
- Not following the consultation process set out in modern awards or registered agreements.
- Not genuinely considering employee feedback.
- Not giving workers reasons for the restructure.
- Not exploring all options for redeployment (e.g. not considering positions that are currently being performed by contractors or labour hire workers).
Getting the restructuring process wrong could open you up to an unfair dismissal claim.
If the dispute ends up being heard by the Fair Work Commission and they find against you, you’ll be looking at a costly award to your employee and a contribution to their costs, plus the potential for any lost wages, as well as paying all your own expenses.
In the end, if you prepare well enough and get the basics right, chances are you will make the necessary changes to your business smoothly. You’ll also be able to adapt and respond, if you need to.
For an exhaustive list of mistakes employers make when restructuring read our full post on common restructuring mistakes.
We always recommend getting specialist advice about your planned changes before you start, even if it is just to confirm you have all your ducks in a row. If you need any assistance with planning or implementing a reorganisation of your business, get in touch with our team of HR experts.
