How can I protect my business and employees in tough times?
Whilst it is an unpleasant reality, everyone is feeling the effects of it - we're officially in a recession. However, it does not have to be all stress, tight-budgets and cutbacks.
It’s a good time for employers and business owners to think about how the current economy may affect their business and their employees. Often there are small changes business owners can make, that make a big difference.
Employer Responsibilities
Even during a recession, employers still have to meet basic obligations to their employees. These include:
- Acting in good faith
- Being fair and reasonable (including following due process)
- Keeping employees informed and involved
A smart first step is to look at your business expenses. Scaling back doesn’t always mean a full restructure. You might reduce overheads by shifting to more remote work, downsizing the office, or cutting back on overtime and new hires.
It’s a good idea to get employees involved in these decisions. They might have some useful ideas. If they know cuts are coming but a restructure isn’t necessary yet, reassuring them can help ease any anxiety.
Any changes to an employee's role, pay, or hours should be discussed with them first, and you’ll need their written agreement. However, we recommend getting in touch with our team first to get some advice on how to approach this to minimise the risk of any complications arising.
Restructuring
If you do need to restructure, it’s important to follow the right legal processes. We can guide you through the process to help to avoid any potential issues down the line.
A key principle of employment law is that you must consult with employees about any changes that may affect them. This applies to the restructuring process. It is important to communicate openly with employees and make sure the process is done right.
If the process is not undertaken correctly, it can result in a claim from an employee for compensation. This compensation often exceeds the cost of obtaining the initial legal advice which could have assisted in avoiding the claim.
Looking on the bright side
A recession can actually be a good time to reassess how your business is running. Are there areas where you can save or streamline? Being proactive now can make a big difference later, and involving your employees in the process can boost morale and cultivate a good team culture.
It’s also a good time to check your employment agreements are up to date and ensure they are solid and reliable when you need them most.
Overall
Taking care of your employees should be your top priority. If you do need to restructure, think about how you can support your team and minimize the impact. This keeps morale high and helps reduce the risk of employment claims.
Need Help? Get in touch!
If you need advice on restructuring, redundancies, or anything else commercial and employment, Brad, Sally and Andy here at Godfreys Law are more than happy to break things down and get your business through any issue – no problem too big, or too small!
Real people. Real solutions. Real practical advice.
