Changing terms and conditions of employment – can it be done?

1. The Process of Changing Terms and Conditions of Employment

Changing terms and conditions of employment can be done through a process of ‘consultation’:

• You need to identify who you need to consult with. There is always a need to consult at an individual level but you may also need to consult with a work’s council, elective staff reps or a trade union. Before you launch to action, do make sure that you check what your consultation requirements are and involve the right people.
• Having identified who you need to consult with about changing terms and conditions of employment, you start your consultation process. This will involve clearly explaining the changes that you intend to make and how they will affect individual employees and when you want the changes to become effective.
• Make sure you explain why the changes are being proposed (the business context)
• Allow the employees a period of time (we typically recommend a period of 4 weeks although this may need to be significantly longer if you are undertaking collective consultation) to read through and understand the changes and to ask any questions (or in some cases, make counter proposals) – it’s good to be clear on who their point of contact will be for this process
• Finally, issue employees with their revised terms and conditions and obtain their signed acceptance.

If you cannot come to an agreement with individual employees on the proposed changes you have a few options:

• You revoke the changes and retain the employees’ existing terms – this may not be ideal given the time you have invested to make the change and doesn’t get you where you wanted to be.
• You negotiate revised terms that are mutually agreeable – this can become complicated if some employees had already signed and accepted the new terms. You would need to extend your consultation to allow for the further required discussions.
• You terminate their employment and offer to re-employ them on the new terms – this will be a last resort as it does carry risk.  In this scenario you have to ensure you have followed the right process to instigate the changes (as above) otherwise you could be at risk of unfair dismissal claims.

3. Recommendations

When you propose to make changes to employees’ terms and conditions, it’s worth looking at which of your existing or proposed employment terms are better than their current terms so that you can use these as leverage to encourage their acceptance.

Employees are likely to be more receptive if you are clear on why you want to make the changes and if you help them to look at the bigger picture and impact on the wider company rather than just personal to them.

Changing employees’ terms and conditions, particularly to their detriment, can be an uncomfortable process but it’s not impossible and it is often fully justified so don’t put it off; we would however encourage you to get in touch before you start so that we can support you through the process to minimise your risk of employee upset or litigation.