Changing terms and conditions for your employees should not be undertaken lightly, as it can represent a legal risk as well as disrupting employee goodwill. But sometimes there are good reasons for making amendments. Here are some justifiable reasons you may need to change an employee’s terms in your business:
1. Avoid redundancies
An example provision that could already exist is a lay-off and short-time working, or LOST, clause. These are used when there is a shortage of work, or insufficient finance available to fund full-time employment which could help avoid redundancies.
Even if there is no provision for lay-off or short-time working in the contract, the need to avoid redundancies can still justify a change if handled appropriately.
2. Change in working location
You may need to make a reasonable change to an employee’s working location due to an office move, for instance, or if one office is closing. There may already be sufficient provision in place in the contract to do this, which makes such a change easier, as long as it is exercised reasonably.
3. Meet new business demands/changing business demands
An employee could be asked to change their working pattern to meet new demands in the business, if you are changing your opening hours to meet customer requirements, for example, or to cover a colleague’s working hours temporarily due to absence.
4. Change in role requirement
Whilst most contracts do highlight that job descriptions are not an exhaustive list of all expected duties, that would only usually cover fairly minor amendments, and there may be a need to make more significant changes to the role and job title.
5. Change in hours
Many contracts include the provision to vary hours of work, including that there could be a need for occasional overtime, to meet business demands, but there could also be a need to make more permanent changes to an employee’s hours for good business reason.
6. Change in bonus scheme
Although most bonuses are discretionary, and often focused on the business performance, there could be a need to change the bonus expectations that were originally contained in a contract of employment.
7. Restructuring
An employer may need to change terms of conditions due to a recent restructure which could include job title and role requirements.
8. Business acquisition
Some changes could be made to remain competitive in the market or following a business acquisition.
A tribunal is more likely to allow a variation of an employment contract where the term being used to achieve the change is specific rather than a general provision that would allow the employer to vary any term. Therefore it is important to seek professional guidance when varying a term already specified in the contract and even more so when the variation is outside of any provisions due to a legitimate business need.
If you would like more information and/or advice about justifiable reasons for changing terms of an employee’s contract, please get in touch.