Current Policy
Employers can change employees’ contracts by dismissing them and then offering them a new contract with different terms. Before implementing such a change employers should follow the statutory code that is in force, otherwise the dismissal will be unfair. However, the practice is not unlawful.
What’s Changing?
- The Government wants to stop unfair practices where workers are pressured to accept worse conditions relating to their pay or hours of work and/ or holiday arrangements under threat of being fired.
- Businesses must follow a fair process that involves genuine consultation with employees.
- The goal is to protect workers’ rights, give them job security, and ensure fair competition between employers.
What Do Employers Need to Know?
- Fire and rehire will be limited by law in relation to “restricted variations”. A ‘restricted variation’ will include changes to pay, working time including times, shift patterns and/or reductions in holiday.
- Dismissing staff to force contract changes will only be allowed in rare cases where the business is in serious financial trouble.
Employers Must Show:
- Real financial difficulties affecting business survival.
- That the contract changes are necessary to deal with those problems.
- That there was no other option but to change contracts.
- Such dismissals will be automatically unfair, with no scope for an employer to argue that that the variation is necessary and unreasonable save and unless the employer is in financial difficulties that effect its ability to carry on as a going concern, or in terms of the public section if the change is necessary to safeguard the financial sustainability of the organisation carrying out its statutory functions. Even in such circumstances an employer will need to show that its actions are fair and reasonable in all the circumstances.
Timescale For Implementation
The draft timeline for the legislation gives employers 12 months to prepare. Employers who need to implement significant changes to their employees’ terms and conditions might want to consider implementing those changes imminently before the new legislation comes into effect.
How Harding Evans Can Help
At Harding Evans, our specialist employment law team can guide employers through these changes. If you’re unsure where to start, we’re here to support you.
Get in touch today on 01633 244233 or wilded@hevans.com.
