Is it possible to change my employees terms and conditions of employment?
There are a variety of ways in which changes can be made to an employee’s terms and conditions of employment:
- By mutual agreement between the employer and employee
- Under the terms of a collective agreement between an employer and trade union
- Via terms in the contract that allow for variations
- By imposing the terms unilaterally
- By dismissing and re-engaging employees (including those employees who refuse to agree to changes)
The simplest way to change terms and conditions is to reach a mutual agreement with the employee(s) whose contract you wish to change.
It’s a fairly straight-forward process; consult with the affected employee(s) and seek their agreement to the proposed changes.
Care should still be taken to ensure that the process is fair and transparent to prevent problems later.
Ensure that you keep full notes of all meetings and copies of all correspondence. If in doubt, write it down!
Where contractual terms have been negotiated with a union, an employee will be bound if the collective agreement (the terms and conditions) have been formally incorporated into the employment contract. Determining this is not so straight-forward. If you are in any doubt, please do not hesitate to contact me for further assistance.
It’s not uncommon for contracts to contain variation clauses. However, it is rare that these will permit the level of changes that employers are likely to seek.
Case law is quite clear on this. Variation clauses are for minor changes ONLY. Employers attempting to use a variation clause to push through major changes would run the risk of breaching the implied duty of mutual trust and confidence. This would undoubtedly result in further claims.
If you’re unable to get agreement to the proposed changes you may impose them unilaterally (i.e. without agreement).
This is a high-risk option, but one which can succeed, especially if it is a change that will have immediate effect e.g. changes to working hours or pay.
However, due to the risks, I recommend that you seek advice before imposing any changes.
Dismissal and Re-engagement
This option is a safer option than imposing changes. Whilst it’s not without risk, it can be managed more effectively and thus the risks are minimised. Any employee who refuses to agree to proposed changes is dismissed and then re-hired on the new terms.
A key factor in making this work for your business is to ensure that you have a genuine business reason for the changes. You would also need to show a sound business need for dismissing employee(s) who refused to accept the changes. Tribunals are reluctant to substitute their own views where it comes to business needs, hence why this option can be so effective.
To Sum Up:
It is possible to change the terms and conditions of your employees’ contracts of employment. However, it is essential that you work within the law and that you act fairly and reasonably.
If you are considering changing your contracts of employment, please get in touch for more advice.
See my contact details at the bottom of this page.
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