Reorganization – what counts as a reorganization in the workplace?
A reorganization means that the business changes its structure, division of labor, departments, or management model, for example, by merging units, creating new roles, or phasing out parts of the business. Reorganization can lead to changed work tasks, new workplaces, or that some employees risk being made redundant, which affects both labor law and the work environment.
What does a reorganization entail?
A reorganization means that a company changes its operational structure, internal organization, or work processes. The purpose is to adapt the operations to new business, economic, or organizational needs.
This can range from merging departments and changing the management structure to introducing new positions or streamlining work methods.
Why is a reorganization being carried out?
The goal of reorganizing is usually to create a more efficient organization. By changing the structure, companies can:
- Reduce costs and improve profitability.
- Meet changing market demands and achieve new business goals.
- Strengthen long-term competitiveness.
- Ensure sustainable business development.
Reorganization and labor law: What does the law say?
From a labor law perspective, a reorganization places high demands on the employer. If the change leads to positions disappearing or a reduced need for staff, the concept of Labor shortage according to The Employment Protection Act (LAS).
Important to know: Labor shortage is a legal term that constitutes objective grounds for termination of employment, even if there is still work left in the business but in a different form or extent.
Employer's responsibilities and obligations
For a reorganization to be legally correct, the employer must handle several critical steps:
- Duty to Negotiate (MBL): According to the Co-determination Act, employers must negotiate with the union before making significant changes.
- Redeployment investigation: Before a termination can occur, the employer must investigate whether the employee can be offered another vacant position.
- Order of Dismissal Rules: In cases of dismissal due to lack of work, the "last in, first out" principle normally applies. Exceptions exist in the Employment Protection Act (LAS) and collective bargaining agreements.
- Risk assessment: Work environment legal risk assessments shall be carried out to see how the change affects staff health and safety.
Strategies for Successful Reorganization
To succeed, more than just legal precision is required; a clear strategy and good communication are essential.
Documentation and Planning
Every step of the process, from analyzing business needs to final decisions, should be carefully documented. A structured action plan is the backbone of a sustainable change process.
Step-by-step guide: How to conduct a legally compliant reorganization
Here you will find a concrete checklist on how to proceed to ensure that your reorganization is both effective and legally sound.
Frequently Asked Questions about Reorganization
What does a reorganization entail?
A reorganization means that the company's structure or way of working changes. This can involve roles, responsibilities, or departments.
Must the employer negotiate with the union during a reorganization?
Yes – if the reorganization can affect employees' terms and conditions, the employer must fulfill their obligation under the Co-determination in the Workplace Act (MBL) and negotiate with trade unions.
Does the employer have to conduct a workplace assessment before reorganization?
Yes – a risk or consequence assessment of the working environment must be carried out, documented, and lead to measures if necessary.
How does the employer handle redundancy?
Primarily through reassignments. If necessary, dismissals will be made in accordance with current regulations.