Questions answered; Rule Changes

13 November 2014

With legislation changing on a regular basis, we answer the questions that will help keep your business compliant;

A reorganisation of our factory will result in slight changes to the duties of some employees and will involve changing their terms and conditions. How can we do this in a way that prevents them from taking legal action?

The best way to avoid legal action is to seek individual agreement to the changes. This can be achieved through a transparent consultation process with all affected employees. This should include discussing the proposed changes, sharing information on the business reasons, and outlining the potential outcome if changes cannot be agreed.

Agreement should be recorded in writing. Often, contracts of employment will contain an express term stating that terms may be varied. This can be a helpful starting point for consultation, however it will not guarantee that the change is lawful.

If voluntary agreement cannot be reached, then you may wish to consider other options such as offering some form of incentive to encourage employee agreement, such as a cash incentive.

If agreement cannot be reached, then you would need to consider the reasonableness of the changes and the motives put forward by the individuals for refusal. An option would be to bring the existing contracts to an end with contractual notice and immediately offering employment under the new terms – a process known as ‘dismissal and reengagement’, albeit that this process is not without legal risk and could result in unfair dismissal claims, dependant on the nature of the change sought.

Another option would be to impose the change without agreement. This could potentially be a high risk strategy, as fundamental changes may amount to a breach of contract, leaving you exposed to constructive unfair dismissal claims.

In this complex area, taking professional advice early is strongly recommended.

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