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welcome to the employment law and hr podcast with your host allison colley [Music] hello and welcome to this episode 168 of the employment law and hr podcast i'm your host alison colley i'm an employment solicitor and hr specialist and i run the firm real employment or advice this podcast has been running since august 2014 and pretty much fortnightly since then i've been providing updates for employers and hr professionals and anyone who's interested in anything employment law and hr related we do of course provide employment or advice for anyone who may need it in addition to pairing and producing the podcast every two weeks myself and my colleagues at real employment or advice provide advice and assistance to both employers and employees who are based throughout the uk so if you have any questions or if you want any specific advice related to your business or industry or just for yourself then you can get in touch with me directly my email is alison at realemplementoradvice.co.uk or you can have a look on our website for all the contact details which is real employment advice dot co dot uk now in this week's episode i'm going to be covering a topic which myself and my colleagues have been asked about fairly frequently of late and certainly it's a reflection on what's happening in the world in terms of the economy and in terms of preparing to open up after lockdown so this week i'm going to be covering the basics of changing terms and conditions so without further ado i'm going to get into this week's featured content okay so as i said at the outset i'm going to be covering a topic which we've been asked a lot about by both individuals and employers and that is where employers are seeking to make changes to employees contracts either because of the economic situation or the uncertainties around business going forward but certainly we're seeing a lot of people looking to make changes either on a individual basis or on a more wide scale workforce basis so in particular i've seen businesses who are trying to avoid making redundancies by reducing the minimum contractual hours across the board from maybe 40 35 for example or employers are seeking to make changes to job roles or responsibilities and that kind of thing so there are a few things that you need to know if you're planning on making changes to terms and conditions of employment within your own organization the first thing i would say is if you are looking to make changes wherever possible it's always important to try to seek agreement to the changes and try to get your staff and employees on board with the changes that you're intending to make and the best way of doing this is to have regular and good open communication about your plans and as far as possible engage staff in helping you to formulate those plans so it's all about communication and how you get the employee buy-in if you like to the potential changes that you're looking to make the second thing to consider is unless it's really urgently required to make the change is it possible to delay the change you're making until you want to make a beneficial change as well so what i mean by that is if for example you have annual pay reviews or pay rises and that's coming up could you tie the change to the terms of their contract in with the annual pay rise so that you're giving employees an incentive to accepting the change in terms it's just a possibility and certainly if you're looking to make changes quickly because of economic circumstances then that may not be possible because you may not be able to award pay rises but it's certainly something to think about when you're planning for making those changes the third thing to think about is how important is the change to you so how critical is it to the business that you make these changes that you're proposing and then finally have you really explored what the nature of the change is and the reason required for it and so as long as you can hopefully establish that then you can communicate that effectively to staff and you're more likely to get them to buy into agreeing to the change so that's a bit of work that you should do at the outset when you're thinking about making changes to employee terms so once you've considered all of that and you're ready to move forward and the next thing you need to look at is is the change you're proposing to make actually to a contractual term so check the contracts make sure that what you're actually doing does refer to a contractual term and not to something else because obviously if it's not contractual then it's much easier to make that change this is one of the reasons why myself and my colleagues advise employers not to have a contractual staff handbook or to make any of their policies and procedures contractual or part of the employment contract because if they are not contractual then of course it's much easier to make those changes if you need to update policies or deal with any regulatory changes or just changes in the business the second thing to consider is is the change that you're proposing to make already authorized by the contract so are you already allowed to make that change by a term contained within the employment contract now this is where we tend to find we get the tricky questions come in and employers don't quite understand sometimes why they can't just make a change because they may very well have a general right to change the terms or a general flexibility clause in the employment contract and many employers think well it says in the contract i can make changes so why can't i make that change well that type of clause only really applies and can only really be relied upon if you're making a minor change or a change that's not detrimental to the employees so you can't rely on that general right to make a change that's already in the contract to make some substantial change or something that's particularly contentious like for example changing hours substantially or changing pay however you may already have a term in the contract that's allowing some flexibility around the terms or allows you to apply a broader approach so you might be able to interpret clause that's already in the contract in a broad way that incorporates the change that you're trying to make so for example when i'm drafting contracts for some businesses that are seasonal they often want to provide guaranteed hours to their staff but have concerns about maybe some drop in hours during the winter months so we incorporate within the terms that they will wherever possible seek to guarantee a set number of hours but due to the seasonal nature of the business there may be times throughout the year where that may fluctuate and that enables them to make those changes as necessary in relation to ours so it's important to check the contract terms what's already in existence and what you could potentially rely on the third thing to consider is if you need to make a contractual change then as i said at the outset the best way of doing that is to seek an agreement but if there is no agreement what are you going to do so what can you do and what are you planning on doing if you propose these changes and the employees do not agree to them well the first thing you could do is to offer an incentive so that could be a financial incentive or some other beneficial incentive to the individuals to induce them to agree to the change often people will provide a lump sum for example in return for agreeing to a set change or you might be able to agree a reduction in hours in return for an increase in holiday entitlement for example so there are lots of ways you can look at it but one of the things you can do is often an incentive now clearly in the current situation that many businesses are finding themselves in the reason that these changes are required is because of you know restrictions on money and the availability of those kind of benefits that you would ordinarily be able to provide stuff so then the second thing you can do is if it's not agreed is you can make the change unilaterally assuming it's one that you can have control over and it doesn't require the other party to cooperate with so for example if you're seeking to reduce salaries or you're reducing hours in order to cut the cost then you could proceed to make the change anyway so if you've gone through a process employees don't agree you put them on notice that you're making the change from a set date and then you go ahead and do it now there are a couple of dangers with doing this of course the employees could seek to resign and make a claim for constructive unfair dismissals so to say that you've fundamentally breached their contract and that's they've had no choice but to resign they could do something called stand and sue so they could remain an employee and continue to work but then pursue a claim against you for unlawful deductions from wages or breach of contract so it doesn't come without possible pitfalls or risks but it is something that you could do if you're not able to reach an agreement and the final thing which i think actually provides somewhat more certainty to employers than unilaterally making the change and then sitting back and waiting to see if employees do take action against you is to terminate their employment on notice and offer to reinstate them on the new terms so this is something that you may find happens more frequently when you're talking to people about changing terms and conditions is if there is no agreement then the employer says okay we're going to bring the current contract to an end on notice and i'm going to offer to re-employ you from the next day on different terms again the danger there is that the employees don't accept the new terms and then they could potentially seek to make a claim for unfair dismissal which you then have to defend and explain the reasons and reasonableness of your decision making in that process of course if you get to that stage then it's always worth getting some legal advice before you make that decision and certainly if you've gone through the right steps in terms of consultation and being reasonable and trying to seek agreement then it'll make it much easier to defend a claim so it's always worth getting some advice if the change you're making is really critical and you plan to go as far as terminating employment for those employees who don't agree the fourth thing to consider is if you are going to be giving notice to terminate employment and re-engage on new terms you need to consider how many employees that may affect so if there could be 20 or more employees who are likely to be affected by the proposed change and are likely to be dismissed then you need to collectively consult with them on the changes and this is in the same way as you would collectively consult with employees where you're intending to make 20 or more employees redundant so it's really important to do that work at the outset about establishing what the changes are the reasons behind it and what your end goal is so you can work out at the very beginning is this something that i'm going to need to collectively consult on and follow a more prescriptive procedure um in order to make the changes so again just reiterating there you need to be prepared for the potential for unfair dismissal claims if employees do refuse to be re-engaged on those terms and if you haven't gone through the collective consultation process it could be fairly costly for you so there are some practical issues that arise when making changes to terms and conditions and these are things i'm often asked about and it's not just about making changes that are negative or have a negative result for the employee or are detrimental to the employees should i say there are some positive changes that would require some practical steps in terms of how you deal with it so when you are making a change to an employment contract whether that be as i say something that you're imposing or if you're agreeing with an employee for example to promote them or to give them a pay rise or just to change their hours and you know maybe as a result of a flexible working request so you need to think about do you need to issue a new contract or will a letter of amendment suffice so my advice in this regard when i'm asked is firstly when was the last time you reviewed your employment contracts and if they have been reviewed recently but your current employees don't have that recent contract so for example if you've got somebody who's on an old legacy contract who hasn't had it updated for some time then when there is a change to their terms it's a really good opportunity to update their terms and conditions in full and provide them with your latest version the second thing is if you're making a change which could be fundamental let's just say for example somebody is promoted or demoted as a result of a process that you've followed then it's important to consider the terms in the round because it might not just be their job title that changes it could be their hours of work their pay it could be that you need to make a change to any post-termination restrictions because of their change in status one of the things that we advise employers on is if you have post-termination restrictions contained within your employment contracts then they should be tailored to the individual so that the length of those restrictions reflects really what you're trying to protect so for example if you have a senior member of staff who's being promoted let's just say a senior sales manager who's being promoted to a senior sales director and then you might want to look at their restrictions and think actually we need to beef these up a bit and we can justify that because they're now in a more influential role and equally if you're demoting someone who's perhaps or changing the job role so someone who is in sales so that was customer facing before maybe moving to a more office based job where they don't have that customer relationship so it might not be reasonable to have lengthy restrictions on them in their employment contract now that their role has changed so you can't justify those so there are lots of reasons why you might want to consider making a change to the contract but also if the change is fairly minor and and or there is just a single change for example and the employment contract terms are up to date and you don't need to make any other changes to them then you can issue a letter which says this is an amendment to your existing terms of employment contained in your contract dated whatever the date is and then put the change and then you say all other terms and conditions remain the same and this is what happens oftentimes when there is a change in pay rate you might use this frequently in your organization or if there's a if there's a change in hours like i say if someone makes a flexible working request and they change from 30 hours to 20 hours you might not need to issue a full new contract it might be sufficient to do it by way of a letter so it's important to check your existing contract terms and see whether you need to issue a new contract or if a letter will be enough and you certainly don't have to issue a new contract every time the second question that often comes up is does the employee have to sign the contract well in my view it's really good practice to make sure that you have a signed copy of the contract on your files in case of a dispute in the future now i appreciate particularly if you've got a large workforce it might not be easy to chase around and get everyone to return a signed copy but i would advise that if you've issued a contract that you give the employee a set amount of time to return it so you expect it to be returned for example within seven to ten days and then if you haven't heard from them then you chase them and say i haven't heard from you can you please arrange to return your contract now if someone still doesn't return the signed contract and they're completely silent on the point so they haven't said i haven't returned it because i object or i haven't returned it because i don't agree they're just silent on it then rather than having to continue to chase them down for example you could just send an email or a letter that says we issued you a contract on this date you haven't returned a signed copy we haven't heard from you to the country so unless we hear from you by xdate we'll take it as read that you have accepted the terms and then you can put a copy of that note on their file and that will be sufficient because they don't have to actually sign the contract have accepted it if you've issued it and they haven't raised any query about it or any objection and they've continued to work then you can be deemed to have accepted those terms as i say it's not necessarily the best way of doing it because you know disputes can arise about which version was applicable at the time and that's where your paperwork comes in but if you go through the process of issuing the letter and then saying if i haven't heard from you then i'll take it as read then that should be sufficient if an issue arose later on and then what if an employee just refuses to sign the contract altogether so often you'll get people who are particularly difficult either they say you know oh i'm not happy but don't actually specify why or they say oh i'm not signing it but don't object to the terms i don't know if it's some kind of tactical thing or people think that by doing that that they're avoiding actually being bound by the terms because of course as i was saying earlier they don't so if you do find someone who's particularly difficult then in my view the most important thing to do is engage with them and ask them why you know why are you unhappy you've said you're unhappy but why and what is it you're particularly unhappy about what can we do and really go through that process with them and then as i say at some point if they're still not engaging with you or identifying their objections to the terms then you can write to them and say you haven't told us exactly what the problem is you've now been working for this x amount of time since we issued the contract if we don't hear back from you one way or another by the state then we'll take it you've accepted them in much the same way as you do with someone who's just um silent on the whole thing so just to round up then in relation to changing terms and conditions of employment i'll just go through my top tips with you the first is to undertake the work at the beginning consider and know your reasons for making the change or changes what are the real reasons for it do you really need to make those changes and how are you going to communicate that to your employees then you need to think about do you need to make the change as a wholesale change across the board or can you make it on a piecemeal basis so is it something you need to do for everyone all at once or can you just do it on a case-by-case basis or over time change the individual contracts as and when things arise the third thing is to think about how far you're prepared to go if the change is rejected by employees or the bulk of employees or individual employees how are you going to deal with that and will it apply to 20 or more employees in your organization and is there a possibility that you could end up dismissing them 20 or more if they reject the change if they are of course then you have to consider collective consultation as i was saying earlier the fifth thing to consider is is there a trade union representative or trade union recognized or an employee representative in your organization already even without the requirement to collectively consult it's really important in my view to get them involved in the process consult with them and have those discussions and of course if you recognize a trade union you might already have a process in place that you're bound by when you are looking at making terms and conditions changes i should have said that before actually so sometimes it will be contained in a collective agreement or some other agreement with the union that you will involve them in any changes that take place and certainly that's true of some of the larger organizations that recognize unions and then finally can you look at linking the change to a beneficial term or incentive for the employee so can you put a positive spin on it can you take away with one hand and give with another is there a way of making it attractive to the employees or at least softening the blow because of course once you've been able to go through the process and you've made the change you still need those employees to be engaged members of your staff and to work hard for you of course so i think what i would like to finalize by saying and wrap up as always is that you are trying to make a change for obviously business reasons but equally you're dealing with individual people who each have individual needs and their own concerns and your workforce are an important part of your business and they are the ones that will make you successful and will bring you out of any recession or economic downturn or as a result of this situation with lockdown so really think about your staff and the impact that may have because you may be able to make a change from an economic standpoint by making changes to the terms and conditions but then if you have a workforce that isn't going to work as hard for you isn't as loyal or as quick to leave as soon as there is another job available then it's going to be much more costly in the long run anyway as always i strongly recommend that you get specific advice about the situation within your own organization if you're looking to make changes or you just want some advice initially because you want to throw around a few ideas or see what your potential options are and maybe even just sense check something that you want to do with somebody independent myself and my colleagues are always available to have a chat with you on the telephone we do offer an initial free call if you phone us we won't immediately start the clock and get our calculator out and start billing you we do have a chat with you and we do like to have a chat with you about your case anyway and get to know you and your business um so do get in touch the email is alison at real employment or advice dot co dot uk and the head office phone number is oh one nine eight three eight nine seven double o three as i finally wrap up this podcast i just have one additional thing to ask of you and that is if you are a listener of the podcast either this is your first time or you're a regular listener and you appreciate the content that i'm providing i'd be really grateful if you could go over to our youtube channel so if you go onto youtube and search real employment law advice you'll find it and subscribe we are doing some videos coming up which are hopefully going to be entertaining and informative around employment law and if you subscribe it's a great way of getting updates and also for us helping us to reach more people so the more subscribers we have the easier it is for other people to find us so i'd be really grateful for your help there and of course if you have any suggestions for topics for the podcast or for the youtube channel then do not hesitate to get in touch i always love to hear from you thanks very much for listening and i hope that you have a fantastic two weeks and i'll be back in two weeks with the next episode thanks again for listening just want to finalize by saying i wouldn't be a lawyer unless i had a legal disclaimer so i must just say to you that the information in this podcast is for information only it's general review and a general update it's always necessary to get specific legal advice about your circumstances so please don't rely on anything that you've heard in this podcast but please do feel free to contact me if you like further information or specific advice