CHANGING EMPLOYMENT CONTRACTS

14 August 2018

• Employment solicitors Liverpool
• employment law
• Solicitors Liverpool
• employment contracts
• employer
• employee
• employment and HR liverpool
• employee contract
• changing employment contracts
• trade unions
• flexible employment contract
• constructive dismissal
• collective consultation
• collective redundancy
• terminated contract
• unilateral contracts

Employers should be aware of the risks involved when changing employment contracts, as employers cannot change contracts unilaterally, therefore employers should ensure that they adhere to the lawful processes when considering changing the terms of an employee contract.

An employer should make sure that they go through the correct procedure when making changes to a contract, ensuring that there will be no negative implications for the employee, as they may risk breaching the contract.

If a breach occurs then the organisation could face extensive damages, as well as unfair constructive dismissal claims.

In some cases, there may be a reduction in pay, which the employee can dispute by bringing a claim against their employer for unlawful deduction.

These claims can cause an influx of negative publicity, as well as damaging staff relations.

 Before committing to changing contracts, employers should consider the following:

Is it necessary to implement changes?

Making changes to employment contracts can be a difficult and disruptive process, therefore an employer should analyse the pros and cons in regards to the changes, and if the cons outweigh the pros, then the organisation should consider alternative options.

Is the employment contract flexible?

In some cases, employee contracts can accommodate changes to the terms and conditions, although the right to vary must be stated clearly and definitive.  For example some contracts may state “subject to amendment”, although if any changes are made employees should be notified explicitly, otherwise changes cannot be lawfully changed.

 Is there room to negotiate with employees?

Some contracts are not as flexible in terms of unilateral changes, therefore an agreement must be made in order to implement the changes, in order to avoid a breach of contract.

Employers would have to go through a process of negotiation by establishing the organisations’ focus and needs.

Employees should also be given the chance to voice their opinion, where they suggest alternative solutions, or even negotiate certain benefits in order to agree with the contact changes.

If an organisation intends to change a variety of employee contracts, then it is important to remember that although the majority may agree to the changes, all employees must agree before any changes can be made.

Can trade unions help?

Some workplaces that are unionised can make changes to contracts through union agreements. Which means the employer does not need individual consent from each employee, although the union agreements must be placed in all individual contracts.

In some instances, it is a requirement to consult with a union regarding changes with a contract, which should be drawn up in a collective or separate agreement.

Is it possible to obtain a written agreement?

Employers are advised to ask employees to sign and agree to official changes to their contracts, in order to avoid disputes in the future.

Can a contract be terminated and re-offered?

Only as a last resort can a contract be terminated and re-offered, once the original contract expires This is usually carried out after an employer fails to negotiate changes with staff.

This process is a preventative measure to avoid breaching contracts, however there is still a risk of an unfair dismissal claim being brought against the organisation, therefore an employer needs to show clearly how they followed the correct procedure in accordance with the changes, which were essential for the organisation’s needs.

Is a collective consultation required?

It is a requirement to carry out a collective consultation involving the discussion of collective redundancies, although only when 20 or more employees are at risk of dismissal.

Employers must consider this in advance, as consultations must be given when a dismissal is first “proposed” or “contemplated”.

Does a notification of change need to be given?

Employees must be informed of any contract changes in a written statement within one month of the change being implemented.