British Gas review employee contracts

Following a dramatic decline of customers and seeing profits halved over the past 10 years, British Gas decided to review the terms of hundreds of employees in an attempt to make savings and open up new job opportunities.

The proposed changes include increasing the 37-hour working week by 3 weeks, excluding morning travel time for mobile engineers and removing weekend and bank holiday premiums.

Following extensive consultation with the GMB Union, employees were expected to agree to the new terms by 1st April 2021. Instead, extensive strike action and allegations of applying bullying tactics put the employer into the difficult decision to give notice to around 100 engineers in a ‘fire and rehire’ process.

How are contractual changes enforced?

When introducing changes to terms and conditions, employers should first evaluate if these changes are beneficial or detrimental to the employee. Ordinarily, increasing holiday or overtime payments will not be met with objection by staff and should be easily implemented.

If the proposed terms are less favourable, employers must first decide if they are substantial or not. This is quite a difficult assessment to make and a very grey area. In the case of British Gas, it was argued that although the proposed changes were deemed substantial, they were implemented to save thousands of jobs and the company therefore felt they were justified.

Whatever the change, organisations must always consult with their workforce. Consultation means outlining the proposal, including the business rationale behind it and giving the team the opportunity to ask questions or make alternative suggestions.

In a unionised environment, this consultation will usually take place with union representatives who will negotiate on behalf of their members.

If no agreement can be reached at the end of the consultation period, employers have a number of options:

• They may decide to abolish plans and not proceed with the changes.
• If the changes are substantial to the point where the fundamentals of the role have changed, redundancies may be considered.
• If the changes are not classed as substantial, or are not affecting the essence of the job, employers may choose to enforce them by giving notice to the current terms and conditions and offering new contracts under the new terms.

What are the risks?

Enforcing new terms can potentially be lawful but in most cases, it will come down to a tribunal’s decision if it is.

Employees may believe that they should have been awarded redundancy instead and if there is no clause in the terms and conditions allowing employers to review contracts, this could lead to potential unfair dismissal claims.

As we can see in the case of British Gas, animosity can also quickly lead to bad publicity and reputational damage. So, enforcing new terms always needs to be carefully considered.

Source: Manuela Grossmann