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Changing Contractual Terms & COVID-19

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By Anthony Wilcox

The changes required to accommodate employees returning to the workplace will in some cases mean changing their employment contracts, for example, shift patterns, working hours or place of work.

Simply pressing ahead with making these changes risks liability. An aggrieved employee can object, work under protest and claim breach of contract to recover any resulting loss, whilst action taken by the employer to enforce the changed terms will be flawed. An employee with two or more years of continuous employment may, in appropriate circumstances, resign and allege constructive unfair dismissal.

Businesses must therefore vary contractual terms correctly.

The starting point is to check the relevant contract for terms reserving the right to make the desired change. If found, the employer can seek to rely upon these, but must still exercise the provisions in a reasonable manner. This includes consulting with the employee to identify potential issues and solutions, as well as ensuring sufficient advance notification of the change. 

Even if the change is permitted, care must be taken if the employee faces difficulties owing to their personal circumstances. The employer must act reasonably to avoid breaching the implied duty of mutual trust and confidence, and must also take care if the employee raises an issue linked to a protected characteristic, since making the change could be discriminatory. For example, problems with childcare could involve indirect sex discrimination, whilst issues managing a medical condition could involve disability discrimination.

Where the employment contract does not provide the required flexibility, the employer will need to vary the terms.

Once again, the employer starts by consulting with each employee (assuming a trade union is not recognised), discussing the proposed change and the reasons. The employer needs to identify any issues for the employee - the above considerations apply. The employee may agree the variation, but if not, the employer either needs to revise the proposal in an effort to win agreement, or look to impose the change. 

Seeking to impose a change is not without risk. The employer seeks agreement from as many employees as possible and exhausts consultation with the others, before serving notice of dismissal on those who fail to agree without appropriate reason whilst also offering them a final opportunity to accept the varied contract and remain in employment.

There are two important factors to consider when imposing changes in this way.

Firstly, the dismissed employees could claim unfair dismissal if they have two or more years of continuous employment. To successfully defend this claim, the employer must evidence reasons necessitating the contractual change and that the procedure followed was reasonable, which includes scrutiny of the consultation process, steps taken to address concerns/issues and the level of agreement achieved.

Secondly, when proposing contract changes and envisaging dismissal if agreement is not secured, every employee in the process is considered to be a ‘proposed dismissal’. If the number of proposed dismissals at an establishment (which can mean part of a business) in any 90 day period totals 20 or more, then the employer has an additional obligation to collectively consult with a recognised trade union or elected employee representatives about prescribed information – calculating numbers means combining these proposed dismissals with any others (including other contract change processes, redundancies etc). Collective consultation must last for at least 30 days, rising to 45 days if there are 100 or more proposed dismissals. These timescales create obvious problems, but with breach potentially rendering dismissals unfair, and possibly allowing a protective award of up to 90 days pay per affected employee, the financial consequences of any breach could be substantial. The employer must also file an HR1 form with the government and failure to do so is a criminal offence.

This post provides only an overview and whilst the Courts may be sympathetic to employers’ circumstances, guidance states that employment law must be followed. With substantial experience advising on such matters, our employment team can advise employers and employees alike - please do not hesitate to make contact with any of the team here at TWM if we may be able to be of service to you.

For further information, please contact Anthony Wilcox, Partner in Employment Law & HR Advice at: anthony.wilcox@twmsolicitors.com

For further details about our expertise in this area, please click here.

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