Employee Rights During Company Restructuring: Protect Your Job

Company restructuring can be unsettling for employees. It often involves organisational changes that may affect roles, duties, terms of employment and, in some cases, job security. Understanding your legal rights during restructuring helps protect your position, ensure fair treatment and navigate issues such as consultation, redundancy, changes to roles and potential claims before Employment Tribunals or civil courts. This guide explains those rights in clear, factual terms and outlines key legal processes and protections.

What Company Restructuring Means

A company restructure refers to changes in the organisation's structure, workforce or operations intended to improve efficiency, cut costs, adapt to market conditions, or drive strategic goals. Restructuring may include:

• Redundancies where roles are no longer needed.
• Changes to job descriptions, duties or reporting lines.
• Variations to contractual terms.
• Transfers of undertakings (TUPE) or departmental changes.

Restructuring is not inherently unlawful, but employers must follow statutory procedures and respect employee rights when implementing changes.

Right to Fair and Meaningful Consultation

Individual and Collective Consultation

If restructuring affects roles or could lead to redundancies, employers must consult employees before final decisions. Consultation gives employees the opportunity to:

• Understand the reasons for the proposed changes.
• Ask questions, raise concerns and seek clarification.
• Propose alternatives to redundancies or adverse changes.
• Discuss selection criteria.

For fewer than 20 redundancies, employers should consult individually with each affected employee. For 20 or more redundancies at one establishment within a 90‑day period, employers must undertake collective consultation with:

• Recognised trade union representatives; or
• Elected employee representatives if no union exists.

Collective consultations must start early, at least 30 days before the first proposed dismissal (or 45 days for 100 or more redundancies). Employers should also consult employees individually alongside collective meetings.

What Consultation Should Cover

Meaningful consultation should address:

• Why restructuring is needed and what business objectives it serves.
• How many roles are affected and why.
• Selection criteria for redundancy or redeployment.
• Steps to avoid or reduce job losses.
• Support available (e.g. retraining, job search time).

Failing to consult properly can lead to claims for unfair dismissal or a protective award (compensation for failure to consult).

Protection Against Unfair Redundancy Selection and Dismissal

Fair Redundancy Selection

If roles are being removed as part of a restructure, employers must apply objective, nondiscriminatory selection criteria when deciding who may be made redundant. Selection must not be based on:

• Protected characteristics such as age, sex, disability, religion, race, sexual orientation or pregnancy.
• Trade union membership or activity.
• Exercising legal rights (e.g. taking parental leave).

Selection based on discriminatory factors may constitute unfair dismissal or a discrimination claim under the Equality Act 2010.

Redundancy and Notice Rights During Restructuring

If restructuring results in redundancy, affected employees with at least two years' continuous service are typically entitled to:

• Statutory redundancy pay based on age and length of service.
• Notice of termination (or pay in lieu of notice).
• Time off to seek alternative employment.

Statutory redundancy pay is calculated using a formula based on weekly pay and years of service. Notice periods depend on length of service and contract terms.

Right to Suitable Alternative Employment

During restructuring, employers must consider whether there are suitable alternative roles available within the organisation. If a suitable role is offered:

• The employee usually has a 4‑week trial period to decide if the new role suits them.
• If the role is genuinely suitable and rejected without reasonable grounds, the employee may lose entitlement to redundancy pay.
• If the role is unsuitable or the employee reasonably rejects it, they may still claim redundancy rights.

Being offered and accepting suitable alternative employment can avoid redundancy and preserve continuous service.

Changes to Contractual Terms

Restructuring may involve proposals to change contractual terms such as:

• Job duties or job title.
• Working hours, location or pay.

Employers cannot impose significant contractual changes unilaterally without consent. They must consult and seek agreement. If an employee refuses changes that are unreasonable, this could lead to:

• A claim for constructive dismissal if the employer's conduct breaches the implied term of mutual trust and confidence.
• A negotiation for a new contract or exit terms.

Transferring Employees and Restructures (TUPE)

If a restructure involves transferring part of the business to a new employer, the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) may apply. TUPE protects employees' terms and continuity of employment when:

• A business or service provision changes hands; or
• Contracts for outsourced services are transferred.

Under TUPE, employers must inform and consult employees or their representatives about the transfer and any measures that may affect them. Redundancies connected to a TUPE transfer can be unlawful unless there is a genuine economic, technical or organisational (ETO) reason.

Legal Remedies for Employees if Rights Are Breached

Employees have legal recourse if restructuring processes are handled unfairly:

Unfair Dismissal Claims

Eligible employees (typically with two years' service) can bring claims for unfair dismissal if:

• The employer fails to engage in meaningful consultation.
• Redundancies are selected unfairly.
• Contractual changes are imposed unlawfully.

Tribunals assess whether the employer acted reasonably in all circumstances.

Discrimination Claims

Employees subjected to discriminatory selection processes or outcomes can bring claims under the Equality Act 2010, regardless of length of service, if discrimination has occurred during restructuring.

Protective Awards

Where employers fail to collectively consult properly, Tribunals can award protective awards of up to 90 days' pay per affected employee.

Other Practical Rights and Support

Right to Time Off

Employees with sufficient service can request reasonable time off to look for new roles, update CVs or undertake training to secure alternative employment.

Right to Be Accompanied

Employees have the right to be accompanied at consultation meetings (often by a colleague or trade union representative) to ensure they understand and engage fully with the process.

Right to Appeal

Employers should offer employees an internal appeal process if they disagree with redundancy decisions or other restructuring outcomes. This helps resolve disputes before they escalate to formal claims.

Key Takeaways

Employees in England and Wales have clear legal rights during company restructuring. Employers must engage in meaningful consultation, apply fair and objective selection criteria, consider alternatives to redundancy, respect statutory notice and redundancy pay rules, and avoid discriminatory practices. Employees may pursue claims for unfair dismissal, discrimination or protective awards if their rights are breached. Understanding these rights and procedures helps employees protect their interests and make informed decisions during challenging organisational changes.