As we swing into Autumn, the resumption of routine encouraged by the gradual return of staff to offices and other workplaces brings with it a focus on working practices which are likely to have changed at various times over the last 18 months. In this week’s Jacksons’ Blog, Paul Clark, Head of Employment, provides some tips for employers contemplating changes to terms and conditions in employment contracts.
- Start by considering whether the change is authorised by the contract. There may be specific flexibility, for example a mobility clause providing for the employer to change the employee’s place of work, or a general flexibility clause reserving the employer’s right to make reasonable changes to terms and conditions. Always bear in mind though that there are limits to which flexibility clauses can be stretched – in several cases, courts and tribunals have recognised an implied term operating to restrict their use.
- Where you need your employees’ agreement to a contractual variation, think about how you are going to obtain this. It will be risking it to send out copies of the new contract together with a covering letter stating that if staff do not object within a fortnight they will be deemed to have accepted the changes, particularly where these are significant. A common tactic is to make a pay rise conditional on acceptance of the new terms although introducing a balance of employer and employee-friendly changes is another option.
- Consultation is key, whether you are relying on a flexibility clause, seeking to agree a contractual variation, or making unilateral changes to terms and conditions. Your employees are more likely to accept that the changes are reasonable where you have explained these to them and why they are necessary for the business. There is a nuclear option if the changes cannot be agreed, however, many termination-and-re-engagement exercises result in unfair dismissal claims because, ultimately, it was unattractive rather than impossible for the employer to continue with the existing terms.
- Unilateral changes to terms and conditions which are imposed without any consultation will almost certainly be repudiatory in the sense that the employer is demonstrating that they no longer intend to be bound by the agreement in place. This carries a risk of constructive dismissal claims, even where the proposed change may not appear fundamental to the employer. Far better to be open with staff and at least try to reach an agreement on proposed changes than risk losing key employees and a trip to the employment tribunal.
- Implied contractual terms can work both ways. Whether an employer or an employee can rely on custom and practice to imply a term or condition into the contract is heavily fact-dependant and therefore a risky argument to run. How long the implied arrangement has been in place is relevant but only one of several factors including, for example, how many people does the arrangement apply to? Has it been relied on before? Employers relying on custom and practice should expect some criticism for not recognising the term or condition in writing at an earlier stage.
- Keeping good records and routinely updating contracts is highly recommended to avoid circumstances where you may need to over-rely on a flexibility clause or find yourself struggling to agree changes to terms and conditions with employees. Fewer and less significant changes are more likely to fall within the reasonable limits of flexibility clauses or be accepted by employees. In a competitive market, there will be a higher expectation of good working practices while the next few months provides an opportunity for all employers to get their house in order as staff returning to the workplace require their contracts updating to reflect new working conditions.
For more advice on terms and conditions of employment, contracts, staff handbooks and policies and procedures, please contact Paul Clark or another member of the Employment Team at Jacksons on 01642 356500/0191 2322574 or visit the Team’s webpage which contains details of their full range of services including a free Employment Documents Audit.
