Restructuring For International Employers

Common Dos and Don'ts

Dos

• Make the most of what you've got: try to maintain the employees you have now to avoid unnecessary restructuring. For example, you could ask your employees to take on different tasks, within reason and as long as you are careful only to change what you are entitled to change unilaterally, as otherwise you may trigger claims. 
• Think long term and plan well: try to consider the long-term effects of workforce reduction, beyond your business' immediate, short-term needs. If you need to restructure, make sure the plan is justifiable from a business perspective and conducted fairly.
• Communicate well: common sense might suggest that this means fully and frequently communicating with your employees and in fact, in most countries, transparency is the key. But be aware that there are rules in some places that restrict how you should communicate and at what stage, so take local advice and communicate appropriately.
• There is no one-size-fits-all: restructuring law is complex and easy to get wrong and the rules vary widely across the world (covering time limits, consultation rights and collective redundancy thresholds, to name but a few), so ensure to take legal advice in each jurisdiction. The cost of not doing so can be high.
• Consider reputation: factor in any possible reputational fall-out from a decision to restructure.
• Align your timing: if you are restructuring in several countries, make sure you are aligned with colleagues in terms of timing. This is particularly important for the timing of the announcement, but also for implementation.

Common Dos and Don'ts

Don'ts

• Don't downsize in small, repeated exercises if you can avoid it. Generally, a one-off exercise will maintain morale much better
• Don't make any direct or indirect decisions regarding employees' terms of employment prior to finishing any consultation process that's required in the country concerned.
• Be careful not to select employees for redundancy on grounds that could end up triggering a discrimination claim (e.g. based on gender, race or religion).
• Don't overlook notification obligations to authorities. Many jurisdictions require formal notice to labour authorities or employment agencies—failure to comply can invalidate dismissals or lead to penalties.
• And Don't forget - how you act to make the process as fair and equitable as possible will be remembered for a long time and contribute to the level of trust people feel in the organisation.

At a glance

Thresholds for collective dismissal/redundancy obligations

The table below is a high-level summary of key collective dismissal/redundancy obligations, focusing on both internal and external notification and consultation requirements. You can click on the country name for the further details. This will enable you to see, where applicable, how a company/establishment is defined, how to calculate the number of dismissals, and if other obligations may apply (such as preparing and negotiating social, dismissal or action plans). 

Australia

Steven Amendola

1. Consultation requirements

Statutory duty to consult

Australian law requires that where an employer has decided to dismiss 15 or more employees for reasons of an 'economic, technological, structural or similar nature', it must notify and consult with any union(s) of which they could reasonably be expected to have known one or more of the affected employees were members.

Consultation under industrial instruments

Most, but by no means all, Australian employees are covered by a 'modern award'. These are instruments that apply at the level of industry or occupation and include minimum terms and conditions (including pay) for employees covered by those instruments. These can, but are not required to, include a term that requires consultation in advance of collective terminations. In practice, most awards do in fact include such a requirement and require consultation irrespective of the number of affected employees.

Modern awards cover a large proportion of the workforce in Australia but can be displaced by 'enterprise agreements' which are negotiated at the level of the enterprise or business. A smaller, but still significant, proportion of employees are covered by enterprise agreements made between employers and their employees (commonly but not invariably represented by a union). Enterprise agreements contain negotiated terms and conditions which must result in the employees covered by them being 'better off overall' than they would be if the modern award applied. 

In contrast to modern awards, enterprise agreements are positively required to include a 'consultation term' that requires the employer to consult with the employees or their representatives about major workplace changes that will have a significant effect on the employees. If an enterprise agreement does not contain a consultation term, then a prescribed 'model consultation term' is deemed to be a term of the agreement. The model term applies to consultation in relation to a wide range of changes, not just termination of employment. It also applies irrespective of the number of employees who are likely to be affected by the proposed change.

2. Ways to remain below the redundancy thresholds

Redundancy in Australia is generally governed by the National Employment Standards. The Fair Work Act ('FW Act') provides that redundancy is payable when an employee's role is no longer required, except in certain circumstances such as the ordinary and customary turnover of labour or if the employer is a small business employer. Employers are also required to notify government agencies and relevant unions under the FW Act if 15 or more employees are to be made redundant.

One effective approach to remain below the redundancy threshold of 15 or more redundancy dismissals is to invite employees to nominate themselves for redundancy rather than to impose compulsory redundancies. This can reduce employee relations risks and may result in fewer forced redundancies while maintaining fairness and transparency in the process.

A second alternative could be the use of staggered dismissals. This might involve implementing dismissals in stages rather than in one mass process which assists in keeping numbers below the 15-employee notification threshold at any one time. However, employers must be careful not to artificially structure redundancies to avoid obligations, as tribunals and regulators take a substance-over-form approach.

While these measures may help employers remain below the redundancy notification threshold, they do not remove the consultation obligations that apply under the FW Act or the relevant awards/enterprise agreements, and the fact that the redundancies must still be "genuine".

3. Information requirements

Information in relation to the statutory duty to consult

The employer must notify each union that represents any of the affected employees of three things: 

• the proposed dismissals and the reasons for them;
• the number and categories of employees likely to be affected; and
• the time when, or the period over which, the employer intends to carry out the dismissals.

The notice must be given 'as soon as practicable after making the decision', and before dismissing any of the affected employees.

Having provided the requisite information to the relevant union, the employer must give that union an opportunity to consult with the employer on:

• measures to avert or minimise the proposed dismissals; and
• measures (such as finding alternative employment) to mitigate the adverse effects of the proposed dismissals. 

As with the provision of information, the opportunity to consult must be made available 'as soon as practicable after making the decision', and before dismissing any of the affected employees.

This duty to consult arises only where at least one of the affected employees is a member of a trade union, but applies to all employers, irrespective of whether they are covered by an industrial instrument. The law does, however, impose certain consultation obligations on employers who are covered by an industrial instrument, irrespective of whether any or all of the affected employees are union members.

Information in relation to consultation under industrial instruments

The model consultation clause is quite elaborate, but as it applies to collective dismissals it basically requires that where an employer has made a definite decision to introduce a major change that is likely to result in the termination of employees, the employer must: 

• notify the relevant employees of the decision; 
• recognise any representative appointed by the employees for the purposes of consultation;
• as soon as practicable after making the decision, discuss with the relevant employees the introduction of the change, the effect the change is likely to have for employees, and measures the employer is taking to avert or mitigate the adverse effect of the change on the employees;
• provide to the relevant employees, in writing, all relevant information about the change and its expected impact on the employees (although the employer is not required to disclose 'confidential or commercially sensitive information' for this purpose); and
• give prompt and genuine consideration to matters raised about the major change by the relevant employees.

Consultation clauses in awards and agreements vary as to matters of detail, but in general terms, adhere fairly closely to the model consultation clause.

Provision of information to the public authorities

In addition to any information that may need to be provided in order to discharge the duty to consult under the law or an industrial instrument, Australian labour law also requires provision of certain information to the public authorities. This arises where an employer has made a decision to dismiss 15 or more employees 'for reasons of an economic, technological, structural or similar nature'. 

In such circumstances the employer is required to provide written notification of the proposed dismissals to the Chief Executive Officer of Services Australia ('Centrelink') as soon as practicable after the decision to dismiss the employees is made and before the dismissals are effected. The written notification to Centrelink must contain the following information:

• the reasons for the dismissals;
• the number and categories of employees likely to be affected; and
• the time when, or the period over which, the employer intends to carry out the dismissals.

A template written notification to Centrelink can be found on its website.

4. Consultation process

Both the statutory duty to consult, and the obligation to notify Centrelink, are couched in terms of notification 'as soon as practicable' after taking the decision to terminate employment, but before implementing it. The model consultation clause also refers to 'practicability', and although it does not expressly state that consultation is to precede implementation of a decision to terminate, it is clearly premised on the assumption that that will be the case.

Neither the statute nor the model clause give any indication of the duration of the consultative process, although the model clause does require that the employer give 'prompt and genuine' consideration to any matters raised by the employees, and common industrial practice would suggest that under both the model clause and the statute a 'reasonable' amount of time must be allowed to inform and consult with employees in order to establish genuine consultation.

For example, it is most unlikely that consultation would be found to be genuine if the employer were to notify in the morning and proceed with a decision to implement the change and effect the dismissals later that day.

By the same token, neither the legislation nor the model clause contemplates that the consultative process should be permitted to prolong the implementation process beyond what is 'reasonable'. As a rule of thumb, it can be assumed that a reasonable consultative process should not take more than one week.

5. What if you fail to comply?

Failure to comply with industrial instruments

If an employer fails to comply with the information or consultation obligations in an award or enterprise agreement, the employer will be in breach of the general statutory prohibitions on contravening awards or enterprise agreements, and as such may be sanctioned under a 'civil remedy provision'.

In principle, the Australian Federal courts may 'make any order the court considers appropriate' in respect of any such breach. This could include imposition of a monetary penalty of up to AUD 99,000 per breach for corporations and AUD 19,800 per breach for individuals. Theoretically, it could also include an injunction halting the terminations until the employer has discharged its obligations under the relevant consultation clause, or an award of compensation for loss that a person has suffered because of the contravention. In practice, however, few proceedings are brought for breach of consultation requirements, and where it does occur, remedies are limited to monetary penalties. 

Failure to comply with statutory duty to consult

Failure to observe the statutory duty to consult with a relevant trade union can provide the basis for an application to the Fair Work Commission by an affected employee or a trade union for an order to put the employee(s) and/ or unions back in the same position as if the employer had complied with its obligations. This cannot, however, include orders for the reinstatement of affected employees, withdrawal of a notice of termination, or payment of compensation or severance pay. Orders under this provision are rarely made in practice, although they are not entirely unknown. 

Failure to notify Centrelink 

Breach of the statutory duty to notify Centrelink of the impending termination of 15 or more employees is not a civil remedy provision in itself, but dismissal of an employee without such notification is a civil remedy provision, and can be dealt with as such (although the courts are not empowered to grant an injunction in respect of any such contravention).

6. Selection order and protections against dismissal

There is no statutory selection order that must be applied under Australian law.

In principle, practices such as 'last on first off' or 'first on last off' are lawful. However, they should be treated with some caution due to the possibility that they may be found to constitute 'indirect discrimination' on grounds such as age or gender – for example, where disproportionately fewer can satisfy a 'first on last off' requirement due to the effect of past discrimination. Furthermore, there are rules specific to the building and construction industry that may impact the legality of such provisions. 

In this sense, employers must take care when it comes to the reason for making collective dismissals. Clearly a dismissal based on any one of the numerous reasons specified in anti-discrimination law would be unlawful (e.g. race, colour, sex, age, physical or mental disability, marital status, religion, pregnancy, or political opinion). However, employees may also bring a 'general protections' claim against an employer if the employer has taken 'adverse action' against the employee for a prohibited reason. Such reasons include that the employee:

• has a 'workplace right';
• has or has not exercised, or proposes to exercise, a workplace right; 
• is or is not a member of an industrial association; and
• engages or declines to engage in industrial activity

To succeed in an adverse action claim, it must be established that the dismissal or other adverse action was taken by the employer 'because of' one of the prohibited grounds. As a result, many general protections claims turn on the question of why the employer engaged in a particular course of conduct. The employer must also rebut a statutory presumption that the dismissal or other form of adverse action was taken for a prohibited reason.

7. Are additional payments required?

Australian labour law provides employees with a minimum entitlement to severance pay in all cases of redundancy. There are no additional payments to make to employees in cases of collective redundancy. The statutory entitlements may be enhanced (but not reduced) by the terms of an enterprise agreement or a contract of employment.

Severance pay is made to eligible employees in addition to notice of termination and pay-out of accrued entitlements such as unused annual leave or long service leave.

8. Reputational issues

Australia has a strong tradition of union involvement in the workforce, particularly in sectors such as transport, construction, energy, and manufacturing. This influence extends beyond the workplace, with the union movement in Australia maintaining strong connections to the media, and State and Federal politicians, and high-profile restructures have drawn significant media attention. It is also not uncommon for employers to be publicly criticised by politicians if they are seen to be abandoning communities, offshoring work, making employees redundant for profit-driven reasons despite continued strong financial performance or generally treating employees "unfairly". Large employers vying for government contracts should be mindful of these risks when undertaking restructures.

Regulatory intervention is also a growing consideration in Australia, particularly in light of the potential impact of a restructuring exercise on employee wellbeing. For example, we have recently seen a state work health and safety regulator (SafeWork NSW) issue a prohibition notice on an employer, alleging risk of psychological harm during a restructure which resulted in a pause to the redundancy process. This reinforces the importance of employers undertaking genuine consultation during the redundancy process to ensure the health and wellbeing of employees and to mitigate reputational risks.

9. Dos and don'ts

Two High Court decisions have recently been handed down in Australia in relation to restructures and highlight some key dos and don'ts. They can be summarised as follows:

Do consider whether, in all the circumstances, it may be reasonable to retain employees by reducing the number of contractors or by taking other steps including rearranging the workforce. 

Do consider, in cases involving an assessment of whether a contractor should be displaced to allow for redeployment, a broad range of factors. The contractor's contractual terms, degree of permanency and whether their work is specialised in nature, will all be relevant.

Do ensure that employees are not adversely affected because of any reason that is connected to current or future workplace rights (i.e. preventing employees from engaging in future potential protected industrial action). Employers bear the onus and should make sure they can give evidence that their reasons for restructuring are only commercial. For this reason, accurate and frequent record keeping is also key.

Don't ignore redeployment opportunities or fail to comply with the consultation and notification obligations outlined above.

Belgium

Bart Vanschoebeke

Hanne Cattoir

1. Consultation requirements

An employer must inform and consult with employee representatives if considering multiple dismissals for economic or technical reasons.

The information and consultation obligations are relatively limited as long as the threshold for a collective dismissal is not reached. However, if the restructuring involves a collective dismissal, a more formal procedure applies. The number of dismissals required to trigger a collective dismissal is as follows:

• in a technical business unit or organisational division with 20 to 99 employees, ten dismissals in a 60-day period;
• in a technical business unit or organisational division with 100 to 299 employees, 10% of employees within a 60-day period;
• in a technical business unit or organisational division with 300 or more employees, 30 dismissals within a 60-day period.

These thresholds must be applied both at the level of the 'technical business unit' (as established during the most recent social elections for the works council and/or the committee for prevention and protection at work) and at the level of each organisational division. This means, for example, that ten dismissals will trigger a collective dismissal in a technical business unit with more than 300 employees if the redundant employees all work in a single division with fewer than 100 employees.

In certain industry-level collective bargaining agreements, the thresholds are lower and additional consultation requirements exist.

2. Ways to remain below the redundancy thresholds

Staggered dismissals

The strict information and consultation procedure that applies in cases of collective dismissal does not apply if the dismissals are spread over time (in such a way that the thresholds are not exceeded). However, the 60-day period is a "rolling period": if dismissals were to occur today, both the past 60 days and the next 60 days must be looked at to ensure that the thresholds are not exceeded. If the total number of dismissals within those 60-day windows meets the threshold, the strict information and consultation procedure will be triggered. Furthermore, calculating the number of dismissals for the purposes of the above threshold is based on the number of "heads" (and not full-time equivalents). This means, for example, that the dismissal of two part-time employees would count as two dismissals, not one.

If an organisation decides to opt for a phased approach, it should avoid any suggestion that it has done so with the sole purpose of avoiding the legally required information and consultation procedure. Otherwise, this could indicate that the approach is in fact a 'simulation' and not genuine. It is therefore important that any phased approach can be justified by the employer with an objective business reason.

If a selection of affected employees occurs as part of a phased approach, this selection must also be done objectively (e.g. by applying the principle of "last in, first out") in order to avoid any other potential claims, such as discrimination claims.

Voluntary leav

While voluntary leave does not in principle count as a dismissal for the assessment of the collective dismissal threshold, European case law has explained that consultation must be initiated as soon as the employer makes a strategic or commercial decision which leads it to contemplate or plan collective redundancies. This is the case even if the precise details are not yet fully determined. For example, if an employer has the intention of proceeding with a head count reduction, preferably through a voluntary leave scheme, but with provision for making dismissals if necessary (i.e. if there are no candidates for the voluntary leave scheme), an intention must be announced and consultation must be initiated. 

3. Information requirements

The following information must be provided in writing to employee representatives in the case of a collective dismissal process:

• The reasons for the proposed dismissals.
• The proposed method of selecting employees who may be dismissed.
• The number of employees who may be dismissed and the proportion of those who are blue-collar and white-collar workers.
• The total number of employees and the proportion of those who are blue-collar and white-collar workers.
• The proposed method of calculating the amount of any extra-legal severance payments (i.e. 'a social plan'). At this stage of the process, most organisations only confirm that they will observe their legal obligations and that they will offer fair severance conditions. In practice, the social plan negotiations most often only start after the end of the consultation phase. 
• The period over which the dismissals are to take effect.

Consultations must begin 'in good time', before management has taken a formal decision ('intention') that triggers the collective dismissal. The employer's provision of the above information marks the start of the consultation period.

The provision of information and the consultation takes place with the works council, or the trade union delegation in the absence of a work council. If no trade union delegation exists, it takes place with the committee for prevention and protection at work and if no social bodies exist at all, with all employees. The employee representatives may ask to be assisted by external union secretaries. In principle, the employer may refuse, but most organisations allow this.

Organisations are also required to notify different external authorities in Belgium about the intention to proceed with collective dismissals. This should take place on the same day as the first notification / announcement to the relevant internal body (e.g. the works council). When the information and consultation process is finished and the organisation makes a decision, different external authorities must again be notified of this decision.

4. Consultation process

Consultation must allow the employee representatives to ask questions, challenge the management's proposal and suggest alternatives, aimed at:

• avoiding the dismissals;
• reducing the number of employees to be dismissed;
• mitigating the consequences of the dismissals.

Management must answer all relevant questions and carefully examine any proposals made by the employee representatives. 

The law does not define a minimum or maximum duration for the consultation. In 2024, the average consultation procedure for collective dismissal procedures lasted 78 days (with a median of 64 days). In about 68% of cases, the consultation was concluded in less than 90 days. About 80% of the consultation procedures took less than 120 days.

Ideally, the parties should mutually agree to conclude the consultation procedure. If that is not possible, the employer may unilaterally conclude the consultation process once all relevant questions have been answered.

5. What if you fail to comply?

If the employer fails to comply with the information and consultation requirements the consequences are the same for breach of either one or both requirements.

If trade unions or individual employees believe that they have not been properly consulted, either can start summary proceedings before the President of the labour court and ask for the restructuring to be suspended until the consultation process has been finalised.

Dismissed employees may also claim damages, which rarely exceed EUR 10,000 gross per employee.

If the employer decides to prematurely end the consultation phase in case of a collective dismissal procedure, the trade unions may officially object to this within 30 days of that decision and employees who have been made redundant may ask to be reinstated on the basis that the employer did not consult properly.

Finally, criminal penalties apply both for the organisation and its directors who have not complied with the information and consultation obligations. However, criminal prosecution is rare.

6. Selection order and protections against dismissal

There is no statutory selection order for dismissals under Belgian law. No specific order needs be taken into account in carrying out dismissals, unless this is determined at the level of the Joint Committee (a permanent body composed of employer representatives and trade unions) or at the level of the organisation.

The selection of affected employees must in any case be carried out objectively (e.g. all employees of a certain division, selection by applying the principle of "last in, first out", selection based on skills/performance score, etc.) in order to minimise the risk of any potential claims, such as discrimination claims, from arising.

Particular care must be taken with regard to the dismissal reason when dismissing protected employees. Dismissing for any of the following reasons would be unlawful:

• gender, pregnancy, family responsibilities, and the use of breastfeeding breaks during work;
• parental, adoption and paternity leave;
• educational leave;
• time credit and career breaks;
• the carrying out of activities as a prevention adviser;
• that the employee has filed a complaint or given a statement in relation to violence, harassment or sexual intimidation;
• a political mandate;
• the filing of a claim for discrimination;
• making a report covered by the whistleblower protection laws;
• that the employee has made comments on the work rules during the introduction or modification procedure for those rules.

In some specific situations, particular rules also need to be taken into account:

• Collective dismissal: In the event of a collective dismissal under Belgian law, the dismissal criteria as determined by the works council must be taken into account.
• For employee representatives in works council and/or in the committee for prevention and protection at work and/ or members of trade union delegations very specific dismissal procedures must be complied with (if not, very high indemnities of up to eight years' remuneration may be payable).

7. Are additional payments required?

Other payments that might apply in cases of collective redundancy include:

• Collective dismissal indemnity: if applicable, this corresponds for most employees to about EUR 500 per month, for a maximum period of four months.
• Closure indemnity: for closures as of 1 February 2025 this corresponds to EUR 202.93 per year of service with a maximum of 20 years, plus an additional EUR 202.93 per year of service after the age of 45 with a maximum of 19 years.
• Early-retirement benefits known as Unemployment with Company Allowance ('UCA'), provided that the employees meet the applicable age and other conditions. In a restructuring, the Minister of Work can be asked upon certain conditions to reduce the age limit for UCA. (Note that this scheme will soon be abolished according to the new Government Agreement).
• Depending on the number of dismissed employees, the organisation may be obliged to establish an employment cell. All redundant employees must then be offered the opportunity to participate in the employment cell. They will be offered outplacement guidance at the employer's expense, and they must receive a 'redeployment indemnity'. The 'redeployment indemnity' can be deducted from the severance indemnity in lieu of notice, so it is only an additional cost for the employer if the redeployment indemnity is higher than the severance indemnity in lieu of notice. 

In cases of collective dismissal, it is also common practice in Belgium to negotiate a social plan with the trade unions, containing extra-legal benefits granted on top of the normal mandatory severance payments. A social plan typically provides for one or more of the following benefits:

• an additional severance payment of one or more months;
• a seniority premium (e.g. EUR 1,000 to EUR 2,500 gross per year of service);
• a doubling of the closure indemnity;
• improved outplacement services;
• a voluntary departure programme;
• job security for employees who stay with the company.

Before starting negotiations, it can be useful to make a benchmark of what has recently been granted by similar organisations in the same branch of the industry and the same region.

8. Reputational issues

Reputational damage is rather a moderate risk, at least if there is a real business case for the workforce reduction. Press coverage at the time of announcement of the intention to proceed with a workforce reduction is not unusual. However, in most cases this is limited to the start of the project and possibly also in the event negotiations on a potential social plan are unsuccessful. Unions might then increase pressure on management by complaining in the press about the lack of an adequate social plan.

9. Dos and don'ts

Do consider making a benchmark of what has recently been granted in social plans by similar employers in the same industry branch and in the same region before starting negotiations. In the event of a collective dismissal, it is common practice in Belgium to negotiate a social plan with the trade unions which contains extra-legal benefits granted on top of the normal mandatory severance payments. Negotiations can be expected to be tough if the economy declines and the chances of redeployment are low.

Do make sure you align your timing with affiliates in other countries if the reduction relates to several countries. This holds both for the timing of the announcement and for the timing of the implementation.

Do prepare ahead of consultation with employee representatives, because during the consultation management must answer all relevant questions and carefully examine any proposals made by the representatives. At a minimum, gather the following information before announcing a restructuring project: the reasons for the proposed workforce reduction, the proposed method of selecting employees who may be dismissed, the number of employees who may be dismissed, and the timeline for dismissals. If protected workers are impacted, specific procedures will have to be observed, so this should be mapped and carefully prepared.

Don't state that the redundancy project is decided until the end of the consultation phase.

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