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FLEXIBLE WORKING
June 2009
FLEXIBLE WORKING
IMPOSING FLEXIBLE WORKING CHANGES
In order to avoid redundancies, you may have already asked staff to agree to temporary flexible working measures, such as reduced hours. But if there are not enough volunteers, how do you impose the changes that you need to make?
Last option left
If you have followed our previous article on flexible working alternatives and still have not been able to make sufficient cost savings, there is still one option left. This is to impose changes on to employees, e.g. by reducing hours and pay,
Be safe, not sorry. So how do you go ahead with this and, at the same time, stay on the right side of the law?
Legal issues
Introducing changes without an employee’s consent is not as straight forward as you may think. Any attempt to “unilaterally” vary a contract of employment, i.e. without first obtaining the employee’s written consent, puts you at risk of being taken to tribunal.
Example. If you tried to reduce hours and pay on a pro-rata basis, you would risk a claim of “unlawful deduction of wages”. Equally, should the employee resign over your imposed changes, you could face a breach of contract and constructive dismissal claim. If any one of these claims were successful, it could wipe out any savings that you were trying to make.
Consultation.
For this reason, you must make a last attempt at consultation. This may be through employee, or if applicable, trade union representatives.
Tip 1. Rather than seeing this as a chore, remember that this consultation is your last chance to show why any voluntary measures have not yielded sufficient cost-savings.
Tip 2. As this is your last opportunity to persuade staff to voluntarily agree to flexible measures, such as pay cuts, make them temporary. Set a time period that they will last for and make it subject to review. If you need to extend it later, have evidence to back up why this is.
Contractual changes
If one or more employees still refuse to accept a pay cut, you will have no option but to formally terminate their existing contracts and issue new ones. At this point, the employee could (1) claim they have been constructively dismissed (2) accept it or (3) refuse to sign it but still perform their duties under the new terms (the longer they do this for, the easier it will be for you to argue the new terms have been accepted)
Contractual flexibility
As difficult trading conditions may be around for a while, consider amending your contracts to give you flexibility to reduce working hours. You could use the following clause: “There may be circumstances outside our control which require us to introduce reduced working hours. This measure is a last resort and will only be used when trading conditions are such that redundancies would be the only viable alternative. Should these conditions arise, we retain the right to introduce reduced working and cut salaries or wages on a pro rata basis for a limited period of time that is subject to review”
Source: Tips & Advice Personnel 25thJune 2009
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