Service Reviews and Restructure - What do we need to know?

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07 July, 2020

Laura Cieplak

COVID-19 has presented several organisational challenges over the last few months, a notable concern of many organisations is their business efficiency. Whilst the pandemic had posed several problems and challenges, it may offer opportunity for Registered Providers (RP) with the opportunity to reflect on their current structure and process, and review this to ensure resilience across the organisation as a whole. We understand that many RP's will have an increased need to safeguard their financial viability, making it even more essential to review their staffing requirements and identify any efficiencies that can be made.

Service reviews provide an excellent means of assessing any strengths and vulnerabilities in your current business model. Similarly, they provide a process to review the structure in place for your staff and consider any changes to boost morale and promote employee relations in these difficult times.

It is important to understand the implications of service reviews, from an employment law perspective and any obligations on RP's, as an employer, in any resulting restructure. Below, we highlight some of the main considerations to be aware of.

What is the purpose of a service review?

The main aims of a service review are to undertake a full business health check; drive efficiency and ensure that the practical functions of your organisation align with your short, medium and long-term business plan.

Service reviews can assist employers in taking a 'bird's eye view' of their organisation, in order to decide how to move forward and ensured continued strength. Service reviews often result in organisations implementing cost saving measures; sound management and governance structures; implementing HR and people strategies and robust structures.

What process should we follow?

The first step would be to conduct an efficiency review of your organisation as a whole, focussing on issues such as resilience, role definition and financial sustainability. Secondly arises the need to develop a solid business rationale, for any changes that may be considered to the organisation.

In doing this, you will begin to develop a sound business case, outlining the need to review the structures and functions of the business. In creating a business case, organisations will begin to develop new structures and roles, to help drive the needs and demands of the business forward.

The need to restructure your organisation will likely give rise to inform and consult with your employees. In addition, if you are implementing changes that are intended to affect over 20 employees, you will be obligated to inform and consult with appropriate representatives, which will be Trade Union representatives or elected employee representatives, in accordance with the Trade Union and Labour Relations (Consolidation) Act 1992 ('TULR(C)A'). The process of collective consultation imposes several obligations on an employer and can be considerably complex and time-consuming, especially when coupled with the need to encourage amicable employer/employee relations.

This requirement is not unique to situations where redundancies are planned. If contractual changes are planned for employees ultimately your organisation may need to dismiss these employees and re-engage them on the new contractual terms making it necessary to follow the consultation process set out in TULR(C)A.

The final stage will be to implement these changes, which can cause practical issues and teething problems at every level of the organisation. We experience these challenges regularly with clients, helping us to develop considerable foresight and the ability to help mitigate the effects of these problems, prior to them arising.

What processes can be triggered by service reviews?

Service reviews can regularly give rise to restructures, changes to terms and conditions of employment and role definitions. These outcomes will likely result in significant changes for your employees and in doing so, it is necessary to ensure the process of implementing these changes are dealt with sensitively and in a compliant way.

For many RP's, changing the terms of conditions of your employees' employment is likely to require engagement with recognised Trade Unions or employee representatives. These processes naturally give rise, on behalf of an employer, to give sufficient information and scope for meaningful consultation to take place. We can work alongside employers to ensure these processes are effective, and achieve the outcomes you intend, accounting for any potential risk factors. If these changes are being made whilst social distancing is in place consideration should also be given to the practicalities of how these processes take place.

In some circumstances, your service review may highlight the need to make redundancies, to aid cash follow and increase efficiency. Redundancy is a naturally contentious process, particularly where there is a need to make widescale redundancy. Alongside this, whilst there are many organisational benefits to redundancy exercises, dismissed employees may also be eligible to bring a claim, presenting various risks and challenges. This increases the need to ensure you follow robust redundancy procedures and seek support prior to making dismissals.

COVID-19 has made it necessary for RPs to consider and review their own efficiency and viability of their organisations. To ensure you protect the organisation, seek support through the review process and the changes you intend to implement. We pride ourselves on our expertise in this area and will be happy work alongside you to achieve your post-COVID-19 goals.

For more information contact Laura Cieplak in our Housing & Regeneration department via email or phone on 01772 220188. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

Learn more about our Housing & Regeneration department here

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