Changing Contracts – is it Lawful?

Changing Contracts – is it Lawful?


  • Date: Friday 25th November 2016

Recently we have been asked if employers can simply change the terms and conditions of their employees.

The answer isn’t quite straight forward so maybe this quick step-by-step guide can provide more clarity on the issue:


Changes
Have you thought through what impact the changes will have in the long term? For example, extending notice periods sounds like a good idea in terms of continuation but don’t forget that employees can hold you to this period, even if the relationship has turned sour. You then have to pay garden leave – does this outweigh the benefits of longer notice periods for handovers and recruitment?
Are the changes major (ie do they put employees at a disadvantage or have a dramatic knock-on effect)? Consider childcare and transport issues, lone working, training and competence issues.


People
Will more than 20 people be affected by major changes? Chances are you may have to engage in collective consultation if the changes ultimately lead to a redundancy situation. This process takes at least three months.
If only a handful of employees are affected, the consultation process can be significantly shorter. Consider when you are commencing consultations: does the period coincide with an important project or your busiest trading period?


Process
In order to implement changes, you need to get the employees’ consent. To achieve this, you need to initiate a consultation period. Consultation meetings are formal meetings where notes are taken and the individual has the right to bring a witness for support. You should outline your business proposal and take comments / suggestions on board. The number of consultation meetings can depend on the magnitude of the changes, the concerns the individuals come back with, and the complexity of the changes in broader business terms.


Once you have received all responses, you can implement the changes if the employees agree.
If the employees do not agree, you need to decide if you want to go ahead anyway. Remember that, if you enforce changes, you effectively terminate the existing terms and engage the employee under revised ones. This termination can constitute a breach of contract, if the changes are significant enough for the employee to claim redundancy. It is important that you ask for a professional opinion at this point, if you haven’t already done so.

 

Source: SSG - Manuela Grossmann


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