Navigating Restructures and Redundancies

What employers need to know about the process

Restructuring your business is rarely straightforward. While a well-planned restructure can set your business up for its next chapter, a rushed one can create legal, financial, and cultural headaches.

If restructure (and redundancies) are something your business is considering, here's a quick overview for Australian employers.

Why do businesses decide to restructure?

There are three main reasons we see businesses restructure:  

• Growth: you've added more people and need to shuffle the team  
• Business change or pivot: a new revenue stream, or closing an old one
• Downsizing: often driven by financial or economic conditions  

There’s been a lot of discussion about how the rise of AI is reshaping teams, but it doesn’t always point to a reduction in headcount. While it’s true, some teams may become leaner, many others are evolving instead, with roles changing as the day‑to‑day work shifts.

In some cases, we’re seeing teams grow as they incorporate AI and require stronger IT expertise and leadership.

Design basics: organisational structure  

Before you make any decisions about restructure, take a step back and map out the actual functions your business needs. Depending on your size these could include leadership, delivery and operations, administration, finance, HR, IT, legal/risk, and marketing.

Not every function needs a dedicated person, some may not be needed at your current size. Here’s a few things to consider:  

• Where do current roles sit within each function, and are they at the right level for what's ahead?
• Are there opportunities to combine or split roles for efficiency or cost saving?
• Which functions are currently internal versus outsourced, and should that change?
• If you were starting your business today, at this stage, what roles would you have?

So, you've decided to restructure. What next?

Once you've decided to go ahead with a restructure, the next question is: will this result in what's called a major workplace change? That includes:  

• termination of employment  
• significant changes in workforce composition, operations, size, or required skill
• reduced job or promotion opportunities or tenure
• altered working hours
• need for retraining or reassignment to other roles or locations
• job restructuring.

If the answer is yes, it’s most likely you have an obligation to begin with a consultation process. This is required under most modern awards and is best practice for all businesses. Consultation is about genuinely engaging your team before a final decision is made.  

Following the right process with your team

At a high level, here’s what the next steps often looks like:

1. Initial consultation meeting. Outline the proposed changes, how they're likely to impact the employee or group of employees, and any measures you've considered to mitigate that impact.
2. Written confirmation. Give the employee/s a summary of your discussion in writing and give them an opportunity to reflect, ask questions and provide feedback. Typically give them 24–48 hours to digest it.
3. Consider their feedback. In some cases their input may shift the final outcome.
4. Final decision and letter. Once you've weighed the feedback, confirm the outcome in writing.

If you are going down the path of redundancy we recommend getting HR support to guide you through the process.

‍Reach out to our team if this is something you would like to discuss.  

When the outcome is redundancy

To stay compliant there are specifics you need to consider:

Make sure it's a genuine redundancy: a clear business case, consideration of alternative measures (such as reduced hours, agreed leave, or a recruitment freeze), and reasonable redeployment where possible.

Redundancy entitlements: Redundancy pay, notice periods, and other payouts vary depending on things like tenure, age, the employment contract, the relevant modern award, and whether you're a small business.  

Always check the contract, the award, and the Fair Work minimums before finalising any numbers. These final payments are also taxed differently, so check your system or with your bookkeeper or accountant before processing.

What are risks when making an employee redundant?

• ‍Unfair dismissal claims. Usually if the correct process has not been followed or making a redundancy that isn't genuine.  ‍
• General protections claims. These relate to adverse action taken against someone for exercising a workplace right or because of a protected attribute. ‍
• Other legal claims. Less common, but could be possible if there’s a breach in contract. Having the right clauses in your employment contracts helps mitigate these.

The fourth risk is cultural. Restructures create uncertainty, and how you handle the process shapes how your team feels about the business long after the change is done. That risk might not have a dollar value attached, but it matters just as much.

HR support to help you navigate the change

If you're navigating a restructure and would like a hand thinking it through, we're here to help. Book a clarity call or get in touch with our team.

Disclaimer: The information provided is general in nature and should not be considered a replacement for HR advice.