Recent Australian HR Institute reporting indicates a significant proportion of employers are actively considering workforce changes, including restructures and redundancies.
That's not surprising given the current economic environment. What is consistent, however, is where we often see these processes begin to come unstuck.
It's not at the point of decision or in the room supporting the process. The procedural gaps, and the risk that follows, often occur much earlier.
In practice, the risk in a restructure often starts well before any formal process is in place. It builds gradually through early discussions, informal signalling, and well-intentioned attempts to keep people informed.
And by the time a formal pathway is triggered, those earlier moments can shape how the entire process is viewed by employees, but also by regulators.
The Good Intentions Trap
Most restructures don't begin with a formal announcement. They begin with leaders trying to do the right thing by:
- Keeping people in the loop
- Providing early visibility
- Testing thinking before decisions are finalised
On the surface, these are positive leadership behaviours that reflect transparency and a desire to manage change responsibly.
The challenge is that these early conversations don't sit in isolation. They interact with a range of obligations across the Fair Work Commission framework, modern awards, and employment contracts, often in ways that aren't immediately obvious.
What feels like an informal discussion internally can carry weight well beyond what was intended. With the rise of psychosocial complaints and a heightened awareness of this risks in the workplace, individual employees are flagging anxiety and uncertainty in relation to these "early warning" conversations which is landing employers trying to do the right thing in hot water.
When a Conversation Starts to Shift the Risk
There isn't always a clear line where a conversation moves from informal to formal. But there are points where the risk profile begins to change.
This can occur when discussions start to signal direction rather than possibility, when roles are described as likely to be impacted, or when outcomes begin to feel, to the employee, predetermined. At that point, the context around those conversations can become important as they may influence how later steps are interpreted and can shape expectations around consultation.
The complexity is that these moments are rarely deliberate. They sit in the grey area between planning and action, where intent is still forming, but perception is already taking hold.
Why This Isn't as Simple as It Looks
Part of the challenge is that restructures don't operate within a single set of rules.
Employers are often navigating multiple, overlapping layers of obligation, including:
- The Fair Work Act, including the concept of genuine redundancy and redeployment
- Modern award or enterprise agreement consultation requirements
- Employment contracts, which may introduce additional expectations or obligations
These layers don't always align neatly. They can interact in ways that shift risk depending on the type of workplace change taking place, timing, language, and sequencing. What might feel like a straightforward internal conversation can have implications across more than one of these layers, particularly once a process begins to take shape.
Where Consultation Becomes Exposed
Consultation is one of the most referenced obligations in a restructure process, and one of the most commonly misunderstood.
At a high level, most employers understand that consultation is required. Where things become more complex is when the consultations start, what they need to involve, and how earlier conversations influence them.
In many cases, consultation is approached as a step in the process. Something that follows a decision once direction has been set.
The difficulty is that earlier discussions can shape how that step is viewed.
If outcomes appear to have been formed before consultation begins, or if prior conversations suggest a direction was already locked in, the process itself can come under scrutiny:
- Employees may point to what was said earlier
- They may question whether input was genuinely considered
- They may interpret the process as confirmation rather than consultation
By the time consultation formally begins, the groundwork has often already been laid, sometimes in ways that are difficult to unwind.
And this is where risk tends to surface, not because consultation was ignored, but because of how the broader process is perceived when looked at in full. The impact of a muddled consultation process could be an unfair dismissal claim from an employee who believes that the process was not genuine and, as a result, seeks compensation for the termination.
Where Employers Get Caught Out
When we step back and look at how these situations unfold in practice, a pattern starts to emerge. Rarely is it a single decision that creates exposure. More often, it's a series of small moments that, when combined, shape how the process is assessed.
We regularly see risk build through:
- Early conversations that signal direction before a process is defined
- Leaders "testing the waters" without clear alignment internally
- Mixed or inconsistent messaging across managers
- Documentation that doesn't fully reflect how decisions were formed
- Processes being used to address performance or conduct issues under the banner of restructure
- Informal discussions not being recognised as part of the formal narrative later on
Individually, these moments can seem minor. Collectively, they can create a version of events that are very different to what was intended.
The Commercial Reality
With more organisations actively considering workforce changes, the volume of restructures is increasing. And with that, so is scrutiny.
The impact of getting this wrong is rarely limited to compliance alone. It can lead to:
- Extended processes and delays
- Increased cost through disputes or claims
- Disruption to operations and team performance
- Ongoing reputational impact within the workforce
- Psychological risks
There is often an assumption that moving cautiously or informally will reduce risk. In practice, it can do the opposite. A poorly executed restructure rarely reduces costs. It tends to delay it, while increasing the complexity and exposure along the way.
What to Consider Before You Say Anything
The most important decisions in a restructure are often made before anything is communicated.
Before conversations begin, there is value in stepping back and understanding:
- Which obligations may be engaged, and how they interact
- What the rationale for change is, and how it is supported
- What alternatives may need to be considered, including redeployment
- How communication will be sequenced across the business
- Whether leaders are aligned on both the message and the approach
These are not always straightforward questions, and the answers will often depend on the specific circumstances. What is consistent, however, is that once conversations begin, the ability to reshape the process becomes more limited.
Closing Thought
Restructures and redundancies are rarely simple, and they are rarely linear. What is said early can carry through the entire process. And while there may not always be a single moment where risk is clearly triggered, there are often points where the path becomes harder to change.
If you're considering changes to your structure, the timing, sequencing, and framing of early conversations can have a material impact on how the process ultimately unfolds. Getting clarity early can make a significant difference.