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so um it's allison colley here from real employment law advice along with my colleagues miranda and albert say hi hi hi and we're going to be doing a just a quick coffee chat about changing terms and conditions in employment contracts and given the current situation that many businesses are finding themselves in we thought that it would be useful to have a run-through of this because we know it's one of the things that people are talking about and also asking us on a regular basis about you know how can we change hours how can we change pay can we make reductions can we change job roles that sort of thing so we thought we'd cover it off for you with a bit of information that hopefully you find helpful so as i said i covered up a bit there about some of the reasons why you might want to make those changes but what are the other reasons why people might want to make those changes to the contracts albert oh well uh hello everyone um well there's lots of different reasons why an employer may want to be looking at changing your terms and conditions uh of course in the current situation with the covered 19 and the pandemic and the huge impact that's had on businesses workload and staffing needs is a major reason why they might be looking at changing your terms and conditions so the demand for the services or the goods that your employer provides but there may be other reasons why so for example if you've actually made a request for flexible working perhaps and that might or would entail a change to your terms and conditions or if a company is looking to perhaps move premises and that might be another more normal should we say reason why they might be looking at reasons to to change your terms and conditions but there's a whole whole range of uh potential reasons uh as we go through today uh the processes are perhaps relatively similar for whatever reason it is but there will always be specifics that need to be discussed in that in that process okay thank you that's great and so miranda if an employer wants to start making some changes to employee contracts what's the first thing that they need to do um the first thing to do is to have a look at the contracts to see whether the change that they want to make is um addressed in the contract so whether they actually need to go to the next step which is obtaining employees consent at all so if it's if it's a change it's anticipated very clearly in the employment contract then they may be able to do it without any you know without any sort of formal process um so what happens then if they um if they don't have the ability to change it within the contract or there isn't a provision in the contract what's the next step that an employer would need to take well they will need to um [Music] consult with the employees whose contracts they need to change in order to um um you know obtain their consent to you know whatever they um want to do um uh yeah that that that's that's the first step yeah and of course obviously the most important thing and the easiest way to make those changes is by agreement isn't it so if the employer wants to make a change let's just say for example to working hours um you know as a result of changes in working practices brought about by uh you know the requirements under the coronavirus risk assessments they need to make changes to working hours if they can get the employees to agree that then of course that negates many of the problems that we may be talking about in a minute um so in terms of consultation albert how do would you start how would you recommend an employer starts that if they want to make some changes to contracts well throughout throughout the whole process the key is really going to be clear communication and honesty about the reasons why you're you're trying to do it um i would suggest that the first step in in the process of trying to get your staff's agreement to to to a change to their terms and conditions now would be a face-to-face talk obviously that might not be possible now but perhaps uh an initial phone call to all of those staff or just the one staff perhaps that that are affected as a as a group using technology or good old-fashioned telephone um to explain exactly why it's necessary um there isn't there isn't a process of consultation in the same sense as a as a redundancy situation might require but it is all about communication it's all about giving a reason why giving them enough information so that employee knows what the change is going to mean to them what uh what impact it will have on their take-home pay or their home life their family and work-life balance um that that's the key is is getting that information across through good clear communication yeah absolutely and i i think that uh if the more honest you can be particularly in the current circumstances the better people will be more likely to be understanding about changes that need to be made now because of the world we're currently living in than they may have been beforehand and it also stops people speculating about the reasons behind it and coming up with their own conclusions which can then lead to disputes down the line so if if an employee agrees then that's all very well and good obviously if you if you've got a good relationship good communication and you can do that then that's fine but if an employee refuses to agree to the change um what are the steps you would need to take then miranda well there are a few options available to the employee the employer could decide to serve the employee with notice to terminate their existing contract and offer re-engagement on new terms or it may be that the employer may decide that um you know the the change that they are seeking is so if it for example change to their role if that change is so is so significant so it's in the new role that they want the employee to do is so wildly different from what they're doing at the moment then they may choose to make put that employee at risk of redundancy um the other option which is a more risky option is to impose the changes and seek on the employees the fact that employee continues to work for the employer to um seek to rely on that um to imply that their implied consent to um the change to their terms so those are the um the options really available to the employer if an employee doesn't agree yeah and of course you know our advice would always be that um terminating and offering re-engagement or imposing the terms should be sort of the last resort if you like and there may be other ways in including you know consultation mediation and discussion that might get you to that point but if an employer gives notice to an employee to terminate their employment and offer them new terms and they've been employed for more than two years what's the risk to the employer there albert well the risk is that the decision to terminate the employment for reasons of refusing to accept those terms and conditions is an unfair dismissal um obviously they're being offering re-engagement on the new terms but there is still a dismissal and a termination of the old contract on the old terms so the risk is that the the employee would argue that it is unfair that's not a potentially fair reason for a dismissal um there is some confusion about whether that would necessarily amount to an unfair dismissal if they had gone through a formal consultation process discussion uh giving them the opportunity to talk about the change or or alternatives to the change uh some kind of negotiation and but the end result was still that termination but the risk the risk is still there that the employee would bring a claim in front of a dismissal that their decision the employer's decision to terminate and then offer reengagement was a breach of trust and confidence have breached the contract and they pursue a claim for damages in the employment tribunal because of that and plus they may not of course accept the new terms in which case you're left without a an employee without the staff to do the job that you wanted and so as you said it should be a last resort really termination and then offering re-engagement because you probably the whole point that you're trying to change the terms is that you want to keep them in employment because you still have some some job some willingness for them to stay on but you need to change it for some for some reason yeah absolutely and and what if the employee tried to claim redundancy miranda so you've got a long-serving employee who's terminated and offered new terms re-engaged on new terms could they seek to say that their position is redundant they could do but i think the the issue with that is that you're ever even offering them um a re-engagement on new terms um albeit that they may be slightly you know slightly to the employee's detriment whether you're dealing pay or why you know requiring them to do additional job duties um then that that you know you you as an employer could argue that you've offered them suitable alternative employment and of course if you've offered them suitable alternative employment then the employee just loses their right to a redundancy payment um now what's what's suitable is is it both objective and subjective um so it it could it it could be a tough argument for the employer to run but nonetheless um you know it's it's it's worth um exploring that as an option if you do have somebody who says well hang on you know what you see you know i've i've been here for 10 years you're trying to change my job um i think i'm entitled to statutory redundancy payment and that that could amount to quite a lot for an employer absolutely yeah and i think i suppose what the the outcome of that is really if you're at the point where you are terminating and um re-engaging that you should get some specific advice about the issue and the changes you're making and one of the things that we've been asked um or i've certainly been asked several times i don't know about you guys but it's by um employers who are looking at making cutbacks well can i change them to a zero hour contract can't i just give them a zero hour contract that seems to be one of the the major ones so taking them from a guaranteed hours contract of perhaps you know 25 or 30 hours and saying i'm going to give you a zero hours contract thereby not i'm having any guarantee of hours or pay um and so so what are your views on that kind of change enforcing that change uh albert what do you think uh well it's not a change that i would uh advise anyone enforcing unilaterally without first seeking the agreement of their staff but i do think it is actually a viable option certainly for businesses in the current circumstance i think it it is an alternative to redundancy it keeps that staff member employed there aren't any guaranteed hours of course but they do have the flexibility to work elsewhere during that period and so that zero hours can't be exclusive um and again provided you you contact the the affected staff and explain to them why it is that you need to to so drastically change their hours to go down onto this zero hour contract if you have that consultation just as in a normal redundancy situation if the employee has enough information to understand why you're doing it um and see that you're trying to keep them on the books employed in a role for when work is available then it is it is an option yeah but again it's all about how you handle it isn't it you know um and often i think uh one of the things that we experience when advising employees is you have employers who are maybe aren't very transparent and don't uh understand or empathize with what the employees are maybe going through and then that causes them to have um to get some loggerheads if you like employees become you know um indignant about it and then more difficult and you know it ends up going down a route where you can't ever end up with an agreement um so yeah absolutely and you know i would go so far as if you're a business owner and you're looking at making reductions and you need to make changes to contracts it's just spelling it out spelling out the financial position of the business and you know if if the changes are going to result in saving jobs then telling staff this you know if we all agree to work four days a week then we can keep everybody employed but if we don't then we may have to make you know three of your colleagues redundant so you know it's just being brutally honest um i think now more than ever given the situation that the world is in um and so just before we we wrap up i'm i just want to cover off about contract terms because the other thing is is to what extent can you include within the contract terms flexibility to make those changes in future so can you or would you advise including an unfettered right to make changes and would that would that work miranda did you want to take that one um well the way that the courts have interpreted that kind of clause is very very restrictively and you're not going to be able to rely on it to change it to make changes to an employee's detriment um you know the courts are very clear that if you want to build a clause in a contract which allows you flexibility to change things it's got to be really really specific otherwise any any ambiguity is just going to be construed against the employer who's seeking to rely on it so um yeah my advice is that that's yeah not not to rely on that as your sort of fail-safe mechanism if you want to make changes in the future yeah absolutely no that's fantastic well hopefully that gives employers some good insight into what they need to be thinking about and making changes is there anything else you want to add or any tips you want to add in there out but for employers someone at your door i'm sorry about that um well in terms of drafting the contract i mean probably the most you're going to be able to get is perhaps mobility clause that's a pretty standard one really um but as miranda said other than that it's going to be very difficult for you to actually predict what might happen in five years time if you need to make a change if you're doing contracts now perhaps there might be a bit more ability to predict perhaps what you might need to do but top tip has got to be communication about why you're why you're looking to make those changes um otherwise you're never going to get the agreement absolutely and what about you miranda any last thoughts on this do you want to add i had a thought about employers who were making who were looking to do this for quite a number of employees and um it's really to do with you know thinking from the outset before you even consult with employees about what your end end game is going to be if if it's unlikely that the employees are going to agree to the um change and so if you're going to you're going to if you're seeking to change the contracts of more than 20 employees and you need to be thinking right if i'm going to be looking at potentially dismissing them not terminating their current contract which is a phase effectively a dismissal and offering them re-engagement on new terms that triggers the collective consultation obligations um yeah where there are 20 more employees and so um and that of course any breach of failure to collectively consult when you're obliged to triggers protective awards which can be really quite financially problematic for employers yeah absolutely no that's a great point to raise actually um so in terms of collective consultation it means that you know engaging with employee representatives or trade union and having a minimum period of consultations so certainly if that's the outcome that's you know potentially going to happen if there isn't an agreement then you should seek advice and get that process in place right at the outset as you say it can be fairly um costly for employers who get it wrong absolutely so yeah well hopefully um everyone's found that useful a little run down on a reminder about what happens if you need to make changes to contracts and of course if you want any advice or assistance from any of us from albert miranda or myself then you can get in touch with us all of our emails are at real employment advice dot co dot uk and we'll be happy to help you so thanks very much for watching thanks guys