How To Manage Restructures And Role Changes In Australia

Restructuring and role changes can be a smart way to navigate shifting markets, streamline costs or set your team up for growth. As a small business owner, you may need to reshape teams, introduce new roles, or retire functions that no longer make sense.

These decisions have legal consequences under Australian employment law. The good news? With a clear plan and the right documents, you can make lawful, fair and well-communicated changes that keep your business moving forward.

In this guide, we’ll walk through what “restructuring and role changes” actually involve, your key legal obligations, how to plan and implement changes step-by-step, and the contracts and policies that support a smooth transition.

What Do We Mean By “Restructuring And Role Changes”?

Restructuring is any significant change to how your business is organised. It might involve consolidating departments, changing reporting lines, outsourcing certain functions, or introducing new products or services that require different skills.

Role changes happen when you modify an employee’s duties, hours, title, or remuneration, or when you move someone into a new position. Sometimes, restructuring leads to genuine redundancies. Other times, it means redesigning positions or consulting with staff about proposed changes to their terms.

From a legal perspective, these changes intersect with employment contracts, modern awards or enterprise agreements, the Fair Work Act 2009 (Cth), and your internal policies. Getting these elements right helps you avoid claims about unfair treatment, underpayments or unlawful termination.

Before You Restructure: Plan, Consult And Assess Risk

A thoughtful plan will save you time, cost and stress later. Before announcing changes, work through these steps.

1) Clarify Your Business Drivers

• What problem are you solving (cost, duplication, new strategy, technology change)?
• Which functions are critical, and which can be consolidated or phased out?
• What skills and roles do you need in the next 12-24 months?

2) Map Your Current And Proposed Structure

• Document your existing structure, key positions and headcount.
• Draft the proposed structure with role descriptions, reporting lines and headcount.
• Identify which roles may be substantially changed or potentially redundant.

3) Check Contracts, Awards And Policies

• Review each employee’s contract for change clauses, consultation requirements and notice provisions.
• Identify applicable modern awards or enterprise agreements and their consultation rules.
• Ensure your internal policies align (e.g. change management, consultation, redeployment and selection criteria).

If you’re proposing to vary duties, location, hours or remuneration, it’s wise to revisit how changing employment contracts works in practice, including when consent is required and how to document variations properly.

4) Assess The Risk Of Redundancy And Unfair Dismissal Claims

If a role will no longer be required due to operational changes, you may be dealing with a potential redundancy. Whether a redundancy is “genuine” turns on factors in the Fair Work Act, including consultation and redeployment efforts, as explained in section 389 (genuine redundancy).

Plan for redeployment options, equitable selection criteria, and a fair process. Where redundancy is unavoidable, budget for severance, notice and accrued entitlements. Tools like Sprintlaw’s redundancy calculator can help you estimate costs.

How To Implement Role Changes Lawfully (Step-By-Step)

Once you’ve planned your restructure, follow a structured process from first consultation to final documentation. This protects your business and supports employee trust.

Step 1: Consult Early And In Good Faith

Under many awards and agreements, you must consult when making major workplace changes that affect employees. Even if there’s no formal requirement, early consultation is best practice.

• Share the business rationale, the proposed changes and likely impacts.
• Invite feedback, consider alternatives, and keep records of all discussions.
• If applicable, consult with any elected representatives or unions.

Step 2: Explore Alternatives To Redundancy

Can you modify roles, offer training, reduce overtime, or reassign duties instead? If reduced hours are proposed, ensure the change is lawful and appropriately documented, as covered in our guide to reducing employee working hours.

Where changes are substantial, you’ll typically need employee consent to vary the contract. If employees agree, formalise changes in writing (see Step 4).

Step 3: Manage Genuine Redundancies Properly

If a position is no longer required due to operational change and there are no suitable redeployment options, proceed with redundancy carefully.

• Confirm the role (not the person) is redundant and apply consistent selection criteria.
• Consult in line with the award/EA and consider any redeployment options across your business or associated entities.
• Calculate termination payments, notice, and accrued entitlements. If you choose to pay out notice rather than have employees work it, check your obligations around payment in lieu of notice.

Step 4: Document Variations And New Roles

For employees who remain but move into new or changed positions, issue updated role descriptions and a contract variation or new contract. Clear documents help avoid disputes and set expectations from day one.

For new positions created by the restructure, engage staff using a compliant Employment Contract that aligns with the relevant award or agreement and reflects the role’s responsibilities, hours, and pay.

Step 5: Communicate Decisions And Support Transitions

• Deliver final decisions in writing and confirm effective dates.
• Provide support such as references, EAP details or time off to attend interviews for departing employees, where appropriate.
• Update your organisation chart, workflows, system access and manager training so the new structure works in practice.

Key Legal Issues When Changing Roles Or Restructuring

There are several legal touchpoints to keep front of mind during a restructure. Addressing these early will keep you compliant and reduce the risk of claims.

Employment Contracts And Consent

Most material changes to duties, location, hours or remuneration require employee agreement unless your contract already allows a specific change. Even where change clauses exist, you still need to act reasonably and in line with awards and the Fair Work Act. Put changes in writing and have both parties sign.

Modern Awards And Consultation Obligations

Check if a modern award or enterprise agreement covers your employees. Awards often require specific consultation steps before implementing major workplace changes. Failing to consult can undermine a “genuine redundancy” defence and expose you to unfair dismissal risk.

Genuine Redundancy Versus Performance Or Misconduct

Redundancy is about the role not being required anymore for business reasons. Performance or conduct issues require a different process (e.g. warnings, performance management). Don’t mask one as the other. If the job still exists and you simply want a different person in it, that’s not redundancy.

Notice, Final Pay And Entitlements

When employment ends, you must provide the correct notice (or pay in lieu), pay out accrued entitlements, and calculate any redundancy pay. Timing and accuracy matter. Keep an eye on minimums under awards and the National Employment Standards, and use tools like a redundancy calculator to help you budget.

Redeployment And Selection Criteria

To support a genuine redundancy, take reasonable steps to explore suitable redeployment within your business or associated entities. Apply objective selection criteria (skills, qualifications, performance) and document your reasoning.

Managing Disputes And Settlement

Even with a fair process, disputes can arise. Where appropriate, a confidential settlement can finalise claims. If you reach a commercial resolution, it’s common to document it with a deed and a release. For context on how these work, see our guide to a deed of release and settlement.

Practical Tips For A Smooth And Fair Restructure

Restructures are as much about communication and implementation as they are about org charts. These practical steps can make a big difference.

• Use plain English: Explain the business rationale and what will change, when, and why.
• Be consistent: Apply your selection and redeployment criteria fairly across the team.
• Keep thorough records: Consultation notes, emails, meeting minutes and decision matrices show you acted reasonably.
• Align documents: Update job descriptions, contracts, workplace policies and handbooks so they match the new reality.
• Train managers: Equip leaders to answer questions, handle sensitive conversations and implement new reporting lines.
• Look after your people: Offer support where possible. A humane process protects culture and your employer brand.

Essential Documents To Support Role Changes And Restructures

The right documents make your restructure clearer, faster and more compliant. Not every business needs all of these, but many will need several.

• Employment Contract (new or updated): Sets out duties, hours, remuneration, location, classification and notice. Use a current, award-aligned Employment Contract for new or changed roles.
• Contract Variation Letter: Records agreed changes to an existing contract (e.g. role title, hours, pay, location) without issuing a full new agreement.
• Position Description: Clarifies responsibilities and KPIs for redesigned roles and supports performance management later.
• Consultation Notices: Compliant notices for award/EA consultation about major workplace change, including timelines for feedback.
• Redundancy/Termination Letter: Confirms end date, notice (or payment in lieu), redundancy pay and final entitlements, consistent with your obligations on payment in lieu of notice.
• Settlement Deed (if relevant): Used to resolve disputes or potential claims and record a mutually agreed exit.
• Workplace Policies: Update change management, grievance, redeployment, and equal opportunity policies so they match your process and award obligations; a structured Workplace Policy suite helps ensure consistency.

FAQs: Common Questions We Hear From Small Businesses

Can I change an employee’s hours or duties without consent?

It depends on the contract and the award. Minor, reasonable changes within the contract’s scope may be permissible, but material changes usually require employee agreement. Proceed carefully and document any variation. Our guide on changing employment contracts explains the boundaries.

How do I know if it’s a genuine redundancy?

A role is genuinely redundant if it’s no longer required due to operational changes and you’ve complied with any applicable consultation obligations and considered reasonable redeployment options. See the Fair Work test in section 389 for the key elements.

What if someone refuses a reasonable change?

Talk early, explore alternatives, and explain why the change is necessary. If agreement can’t be reached and the role in its old form is not required, the conversation may shift to redundancy (subject to a proper process and award obligations). Get advice before making final decisions.

How should I calculate final pay?

Account for notice (or pay in lieu), redundancy pay (if applicable), accrued annual leave and long service leave (depending on the jurisdiction and service). Use a tool like the redundancy calculator to sense-check and cross-reference award or NES minimums.

Key Takeaways

• Restructuring and role changes are lawful when planned, consulted and documented in line with awards and the Fair Work Act.
• Map your current and proposed structures, then consult with affected staff early and in good faith.
• If roles change substantially, secure consent and record it via a contract variation or a new, compliant Employment Contract.
• Where a role is no longer required, follow the genuine redundancy pathway, including consultation, redeployment efforts and correct final payments.
• Use clear letters, updated position descriptions and policy documents to align your legal and operational changes.
• If disputes arise, consider whether a commercial resolution documented by a settlement deed is appropriate.

If you’d like a consultation on managing restructuring and role changes in your small business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.