Career Advice Legal Case studies for employers

When it comes to M&A, corporate downsizing, or new workplace policies, transparency is key

The Background

Life never stands still in Hong Kong. This is particularly true in the labour market, where businesses must work hard to stay competitive and adapt to a shifting marketplace. But if managed poorly, changes in company culture or working environment can create uncertainty for employees and have a serious impact on workforce productivity and morale. 

The Issues

Before implementing any plans, it is necessary to understand whether they will amount to a change in employees’ contractual terms. As a general rule, the terms of an employment contract may be amended only with the consent of the parties involved. Implementing such changes without consent may give rise to claims of breach of contract.
Even when an employer is entitled to implement changes unilaterally, failure to appreciate their impact on employees, and to take steps to engage with the workforce on issues that affect them, can lead to employee disengagement. This ultimately affects the bottom line. 

Effective implementation of a major change requires careful planning and communication. 
When attempting to facilitate a successful organisational change, consider its impact on all employees and whether there is any equally acceptable alternative that would be less disruptive. Anticipate employee objections and consider how the business will respond to them. 

If employee consent is required, consider whether an incentive may aid the transition, and what form of incentive would be best.
If a proposed change is likely to have an impact on employees materially, consider consulting with employees (or, where applicable, union or employee representatives) well ahead of the implementation of any changes, and explaining both the rationale for the change and how it will have an impact on employees in practice.

Carefully assess the merits of all comments or concerns raised during any consultation processes, and be open to the possibility of modifying the proposal in light of any feedback provided. 

Be aware of any training or other forms of support (if any) that could assist employees to adapt to the change. Ensure that any necessary arrangements are in place before they are needed.

Consider the timing of the change. Is the holiday period the best time to announce that the business is considering a large-scale reduction of the workforce? Could the change be implemented gradually, or in stages, to assist employees with the transition?
Once the decision has been made to implement a change, communicate the details clearly and concisely to all affected employees. 
Consider how the message will be communicated most effectively, and what options will be given to employees who would like to respond or raise questions. 

Managers and HR personnel should be informed ahead of any change being communicated to staff, and (where appropriate) be equipped with prepared responses to questions that employees are likely to ask. Ensure that these professionals know who to approach if a question is asked that they cannot respond to adequately. 

Where employees’ questions cannot be answered immediately, put a process in place to allow for appropriate follow-up and ensure that a response is provided in a timely manner. 

The Bottom Line

It is important to understand that employees may react differently to the proposed changes. Some staff members may fear the changes, while others could embrace them. Few people, however, are willing to jump head-first into a situation which they do not fully understand. 
For that reason, transparency is key when it comes to workplace changes. A workforce will generally be more willing to accept major changes – even if it means they are worse off as a result– if they are kept fully informed of the changes that affect them and work is done to ensure that they understand why the change is needed.

This article appeared in the Classified Post print edition as Big changes ahead? Then keep staff clued-up.