HUMAN RESOURCES MANAGEMENT
have not been an option when business demands were greater, butwhichmay result in savings and benefits for both parties such as career breaks, additional unpaid leave, subsidised study breaks and flexible working arrangements. Depending on how good or bad business is employers may
find themselves having to cut deeper still; thismay come in the formof pay reductions, reduced working hours and revision of employee benefits such as reduced pension contributions, cuts to sick pay and maternity top-up benefit.
WHENTERMS AND CONDITIONSNEED TO CHANGE
If changes to terms and conditions are to take effect there needs to be agreement by both parties.The contract of employment pro- vides for certain terms and conditions and employees must agree to the changes proposed by the employer regardless of the rationale for change. The employer cannot unilaterally make the changes without
consent.While some contracts of employment contain a clause that the employer reserves the right tomake amendments to the employees’ contractual terms, it is only an invitation to do so, an invitation to discuss the changes. Such a clause does not give an employer an absolute right tomake unilateral changes. When it comes to changing terms and conditions, much
depends on how the message is communicated to employees. The current economic environment that businesses are oper- ating in is very apparent and employees are very aware of the effects that it is having on businesses.Therefore, it is impor- tant to enter into negotiation with the employees to secure the changes required. If the company is open,honest and clear
about the difficulties that it is experiencing, it may provide a better chance of securing agreement to the changes proposed. It’s important to be aware that employees are entitled to refuse
any proposed changes, and therefore it’s essential that during the consultation process the management team points out all the options that may be taken if all parties are not in agreement, ie short-time, lay-off working arrangementsmay be introduced for a period of time or a worst-case scenario, job losses. Once agreement is given by the employee written consent to
the new contract terms is recommended. It may not always be necessary to redraft or re-issue a new contract to the employee. The change can be reflected in a letter to the employee stating the revised terms and conditions of employment and getting both parties to sign it. This letter will now form part of the contract of employment
as a whole and normally the changes will come into effect one month later. In the instance where employersmay have changed contract terms without gaining prior employee agreement, they could argue that the changeswere accepted by employees as they worked under the new terms without dispute. The legal issues arisingwhen changing terms and conditions in
a contract of employment remain complex and these issues will continue with the uncertainty of the economic outlook. There- fore it is advisable that advice is soughtwhen any changes to terms are being proposed.
This article does not constitute legal advice and should not be taken as such.OwnerManager urges you to obtain professional advicewhen dealingwith legal issues.
‘THE LEGAL ISSUES ARISINGWHEN CHANGING TERMS AND CONDITIONS IN A CONTRACT OF EMPLOYMENT REMAIN COMPLEX AND
THESE ISSUESWILL CONTINUEWITH THE UNCERTAINTY OF THE ECONOMIC OUTLOOK’
VOL 3 ISSUE 3 2010 OWNER MANAGER 39
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