Revising employee contract terms for business benefit

Transcription

1 Revising employee contract terms for business benefit CIPD WEST OF ENGLAND BRANCH EVENT DELIVERD BY EEF - HR & LEGAL TEAM 15 May 2013 Matthew Huggett Emma Hulmes Samantha Moore

2 OUR HR & EMPLOYMENT LAW ADVICE IS SECOND TO NONE Large team of employment lawyers, barristers and HR advisors Understand workforce dynamics better than most so our advice is delivered with insight that no generalist can match. Knowledge fine-tuned by years of working at the meeting point between employees, management and trade unions. Influential relationships with government mean that we don't just keep pace with legislation, we help shape it

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4 By joining EEF as a member you d be joining thousands of EEF member businesses which include:

5 EEF HR & LEGAL TEAM - BRISTOL - Chris Harries Head of HR and Legal Barrister Katy Bond Senior Adviser Solicitor Nevil Chesterfield Principal Adviser Solicitor Matthew Huggett Senior Adviser Legal Executive FCIPD

6 EEF HR & LEGAL TEAM - BRISTOL - Caroline Clarke Adviser Solicitor Simon Pender Principal Adviser Solicitor Eleanor Cowen Adviser Solicitor Emma Hulmes Adviser Solicitor Samantha Moore Senior Adviser Solicitor

7 Session overview Legal environment Matthew Huggett Case studies Emma Hulmes and Samantha Moore Questions and answers Toolkit pack

8 Aims of the Workshop Understand and feel confident how to:- implement changes to your contractual terms; identify contractual terms and the employer s powers to vary those terms; assess the risks involved when varying contractual terms; and Plan and act to minimise those risks.

9 Overview of how to change terms

10 Methods of Changing Contractual Terms Agreement: Safest Methods Employer proposes new terms and the employee accepts Permitted by the Contract: The contract of employment includes provisions allowing the employer to change aspects of the employment relationship unilaterally Collective Agreement: Where there is a term in the contract automatically incorporating collective agreements

11 Methods of Changing Contractual Terms Risky Methods UNILATERAL IMPOSITION OF NEW TERMS: An employer can simply introduce the new terms and hope that the employees accept them DISMISSAL & RE-ENGAGEMENT: If no agreement can be reached, an employer can dismiss the employee and offer re-engagement on the new terms.

12 Identifying contractual terms

13 Identifying Contractual Terms

14 Identifying Contractual Terms

15 Identifying Contractual Terms & The Employer s Powers to vary those Terms Contract of Employment Offer Letter Staff Handbook Policies, Work Rules Collective Agreements Custom & Practice Implied Terms

16 Implied Terms Employee friendly terms Trust & Confidence Health & safety Employer friendly terms Duty to follow employer s reasonable instructions Loyal service, confidentiality

17 How and when to change terms

18 Limits on an Employer s Powers to vary Contractual Terms TUPE no right to make contractual changes when reason for the change is the transfer Implied terms - trust & confidence/duty to act reasonably limits the way employers can exercise discretion and use flexible clauses The need to be mindful of possible discrimination issues Statutory Rights - no right to vary contract so as to remove statutory rights such as minimum wage and annual leave etc.

19 CHANGING TERMS & CONDITIONS AFTER A TUPE TRANSFER PROHIBITED CHANGES Where the sole or principal reason for the change is: the transfer itself a reason connected to the transfer that is not an economic, technical or organisational reason entailing changes in the workforce (i.e. changes in the job functions or numbers of the workforce) PERMITTED CHANGES Where the sole or principal reason for the change is: a reason unconnected with the transfer (unforeseen, unexpected and out of the control of the transferor or transferee) A reason connected with the transfer that is an economic, technical or organisational reason entailing changes in the workforce

20 Bringing about the changes 1. Where the Employer has the Contractual Power Have a clear rationale for imposing the change Give reasonable notice of the change and ensure all employees are aware of the change Invite employees to raise any concerns or questions Offer any reasonable assistance such as training, time off Bring about change on a specific date which employees have been previously advised of

21 Suggested Flexibility Clauses 1. Mobility clauses reserving right to change location of work 2. Reserving right to alter shift patterns/ hours of work 3. Reserving right to introduce short time / lay off 4. Defining duties widely to allow changes in job function 5. Reserving general right to amend terms after giving period of notice 6. Pay (?) - Employers have succeeded in relying on express terms in the contract allowing them to reduce pay but such a term will be carefully scrutinised

22 Bringing about changes 2. Where the employer does not have the contractual power Consult with union/employee reps and individual employees about the proposed changes giving reasons for the changes and explaining their impact Consider offering inducements to employees Seek the written agreement of your employees to the changes Meet with employees who do not agree, listen to their reasons for refusing to accept and address their concerns as far as possible Following that meeting, again seek the written agreement of those who do not accept If you still have employees refusing to agree, decide whether to impose the new terms on them or whether to dismiss and offer to reengage them on the new terms

23 How to deal with Employees who refuse to agree to the Changed Terms 1. Imposing the changes on them THE RISKS Employee brings a claim for breach of contract Employee resigns and claims constructive dismissal Employee claims unlawful deduction from wages Employee insists old terms still apply and causes disruption by refusing to work to new terms if you then dismiss employee, employee may bring claim for unfair dismissal

24 How to deal with Employees who refuse to agree to the Changed Terms 2. Dismissing & Re-engaging THE RISKS Employee brings a claim for unfair dismissal If 20 or more dismissals & no consultation, employee can bring claim for a protective award

25 Deciding whether to impose the changes or to dismiss & re-engage employees IT WILL BE SAFEST TO IMPOSE CHANGES WHEN: The change involves no financial detriment to the employee The impact of the change on the employee is minimal There are no potential discrimination issues WHERE CHANGES HAVE SIGNIFICANT IMPACT ON EMPLOYEES AND/OR HAVE FINANCIAL CONSEQUENCES, IT WILL BE MORE APPROPRIATE TO DISMISS & RE-ENGAGE Dismissal will be potentially fair on the grounds of SOSR (Some Other Substantial Reason) Even if employee succeeds, compensation will be limited because of offer of re-engagement

26 Dismissing Employees & Offering to Reengage on New Terms 1. How to ensure the dismissal is fair Ensure that company has genuine business reasons for proposing changes so that dismissal falls under SOSR Consult, consult, consult Address concerns / offer inducements Make assessment of how much support changes have the less support, the riskier it is to dismiss Dismiss with full contractual notice and offer to re-engage at the same time

27 Dismissing Employees & Offering to Reengage on New Terms 2. Collective Consultation If 20 or more employees have failed to agree to the changes & you propose dismissing & re-engaging them. Then you must collectively consult in the same way as for redundancies If between 20 and 99, must consult for 30 days before issuing notice of dismissal If 100 or more, must consult for 45 days before issuing notice of dismissal Employee can claim up to 90 days pay for an employers failure to collectively consult

28 CASE STUDIES

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