It is important employers act with integrity and in accordance with employment laws, but it is also worth remembering, maintaining good employment relations is essential as well. When firms are thinking of bringing in changes that affect staff, how they reach agreement with staff can make or break the employment relationship. It’s often not the easiest route to just fire and rehire on new terms and conditions.
To help firms walk this road, ACAS have issued new guidance which every employer should be reading.
ACAS’ chief Executive Susan Clews has been quoted saying, “Our new advice is clear, that fire and rehire is an extreme step that can seriously damage working relations and has significant legal risks for organisations. Employers should thoroughly explore all other options first and make every effort to reach agreement with staff on any contract changes. Organisations that consult with their workforce in a genuine and meaningful way about proposed changes can help prevent conflict at work and stay within the law.”
The new guidance gives practical steps with some being a little basic, but they serve as a good reminder.
ACAS start out by reminding employers that any changes to the contract must be agreed by both the employer and employee or worker (or in some circumstances with a trade union or other employee representatives.) That’s the basic step.
They go on to remind employers to ask the kick start questions of what you are trying to achieve and is a full contract change needed. Asking these at the outset will help you be more pragmatic in your planning.
ACAS have produced some good examples of when employers will need to consider issuing changes to employment contracts:
- If a contract of employment is out of date with new laws or regulations – if a contract has never been reissued (i.e., the person has been with the business for up to or over 15 years for example), it is highly likely the written contract won’t have all the new laws and clauses required.
- If the persons job role has change (this doesn’t just mean the job title but the grade, which can mean a change in benefits, roles and responsibilities and location. Arguably you could issue an addendum to the contract, but it is worth looking at the whole contract to make sure it is current and up to date first.
- If the company is introducing new terms and conditions, for example contractual redundancy pay or enhanced maternity, paternity, parental or adoption leave and pay.
- If a company is proposing new organisation changes i.e. different office location or change of manager or a change in benefits. The latter being the more meaty and weighty change. The first two could arguably be handled with a single letter which pays reference to the original Contract of Employment.
- If a company needs to change its business strategy to better adapt to changing customer or client needs.
- If for economic reasons, for example if an organisation is considering a restructure or other changes to stay competitive in a changing market, a new contract is likely to be needed.
We would suggest a 7th example. If you are looking to bring in new or re-issue, restricted covenant clauses. These are best handled as part of issuing a new up to date contract, as the clause has potential legal ramifications and may often need to refer to other sections in the contract of employment.
Exploring options and being clear about why a contract change may be needed, will help when it comes to informing and consulting with employees (and representatives) about potential contract changes.
If you’re in any doubt as to how to handle contract changes in your firm and whether it is really needed, call our expert team today and we can help minimise any risk for your business. Email HRhelp@ihrsolutions.co.uk, call 01604 709509 or visit our website.