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Employment Law Bulletin - June 2020

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We hope that you and your families are keeping safe in this difficult time.

We realise that, as lockdown starts to ease, many of you are thinking to the future and considering how your workforce might need to change as a result of the pandemic.

In this newsletter we are going to think about the options available to you, and some of the legal issues you need to consider.

Past and upcoming webinars 

Thank you to everyone who joined us at our webinars on redundancies and reorganisations. For those who may have missed the sessions or if you would like to share the recordings with your colleagues, please find below the links:

Our next webinar on Difficult conversations / negotiating exits is on Thursday 16th July 2020 from 11am to 12pm and we will send the invitation nearer the time.

Variation of contract 

If you have a downturn in business, you might want to think about reducing employees’ hours of work or reducing their pay. You might need to reduce the commission or bonuses that employees are entitled to receive, or you might want to change the place of work so that more employees are working from home on a regular basis.

If you need to make these sorts of changes the first question is whether the criteria that you want to change is contractual. If there is a written agreement relating to the criteria it will be contractual. If there is not a written agreement, but you have always operated in this way, it is likely to be an implied contractual term through custom and practice. Therefore, you would be trying to vary a contract of employment.

Action: If you are unsure whether the criteria you want to vary is contractual please contact us to discuss.

Start by checking to see if you have a flexibility clause in your contracts of employment. For example, a bonus scheme might say that the calculations of bonuses is subject to review. However, even if you do have a flexibility clause it must still be applied reasonably. You would need to consult with employees and address any specific concerns that they might have.

If there is no flexibility clause you need to take the following approach:

1. Consult with employees - if 20 or more employees are affected, the collective consultation obligations may arise, which mean you will need to inform the Secretary of State and consult with representatives. Let us know if you require advice on whether these duties arise. In any event, you may still need to talk to each employee individually to deal with any personal concerns.

2. If you reach agreement through the consultation, write to each employee to confirm the change that has been made.

3. If the change is for a limited period of time put in place a review date. Do not commit to making a change on that date, just commit to a review.

If consultation fails, you have three options available to you: 

1. Abandon the plans - sometimes the consultation shows you that the plans are just not right for the business. Doing something different can be the right solution.

2. Force the changes - this is risky because you would be breaching the employees’ contracts, and they could resign and claim constructive dismissal. In addition, if the changes would reduce in lower pay, they could remain employed and bring unlawful deduction claims. However, if you could show that you had carried out meaningful consultation and that you had a good, strong business reason for making the change you may be able defend any claims that are made.

Action: Before forcing any changes please contact us to discuss the specific situation so that we can advise on whether an Employment Tribunal is likely to conclude that you have a strong business reason for making the change. 

3. Dismiss the employees and offer re-engagement on the new terms. If there were 20-99 employees affected you would have to consult with representatives for a minimum of 30 days, and if there were 100+ employees affected you would have to consult with representatives for a minimum of 45 days, before taking this step. This is another risky option because the employees might claim unfair dismissal, and there is the risk that they do not accept the new terms and then you have lost your workforce. Again, if you could show that you had a good, strong business reason you could defend the action that you have taken.

Action: Before carrying out any dismissals please contact us to discuss the situation and the plan.

Contract forms 

The pandemic might mean that you need to have a more flexible workforce. It could be useful, therefore, to think about different contract formats that might give you the flexibility you need. These would be relevant if you were thinking that you need extra staff in the near future, but you do not have the confidence that you will need them permanently, or if you are not sure how much work you will have available for them.

Part-time

A part-time employee is anyone who works less than the normal full-time hours in your organisation. A part-time employee must not be treated less favourably than a full-time employee. This means that all benefits that a full-time employee is entitled to receive must be offered to a part-time employee on a pro-rata basis. If there are benefits that cannot be provided in this way (e.g. a company car) you should look at a cash equivalent.

Action: Make sure that part-time employees are not disadvantaged indirectly in any way. For example, make sure that they have the same access to training and promotion opportunities as full-time employees.  

Fixed-term

A fixed-term employee is someone who works on a contract that is due to expire on a particular date, or when a particular event occurs (e.g. a project coming to an end). A fixed-term employee should not be treated less favourably than a permanent employee and should be made aware of any permanent vacancies in the organisation. There is no right to be given a permanent position, or to be favoured in any recruitment process for a permanent position.

If a fixed-term contract runs for two years or more the employee would be entitled to receive a redundancy payment when the contract comes to an end (and could have claims for unfair dismissal if you do not follow a fair process and act reasonably). If an employee works on a fixed-term contract, or a series of fixed-term contracts, that results in four years’ continuous service the employee has to be treated as a permanent employee.

You do not have the right to terminate a fixed-term contract early unless you have added that flexibility into the contract of employment. For example, you might write:

"This contract will end on 31 August 2020. If the work that you are assigned to do comes to an end prior to that date your contract will be terminated early. You will receive one week’s notice of the intention to terminate your contract."

If you do not have such a clause in your contract of employment you would have to pay the employee up to the end of the contract.

Action: Make sure that you build flexibility of termination into your contract of employment. Contact us for advice on appropriate wording

Zero hours

A zero hours’ contract is one where you do not guarantee a certain amount of work for an employee. You cannot restrict the individual from working for another employer whilst having a zero hours agreement with you, so you would have to allow the individual some flexibility in accepting work from you.

As you have no obligation to provide work, someone on a zero hours’ contract would not meet the definition of an employee. However, it is quite possible that the individual would be a worker and therefore would be entitled to paid annual leave and to be paid at least the National Minimum/Living Wage per hour.

Action: If you would like any help with writing a zero hours’ agreement please contact us for assistance.

Flexible Working Requests

In addition to you needing some flexibility as the country comes out of lockdown, employees might also need some flexibility. This could be due to childcare responsibilities (given that schools will not fully reopen before the start of next academic year) or it could be due to health concerns. There might be employees who have mental health difficulties as a result of the lockdown, and do not feel well enough to work full-time as a result.

Any employee with at least 26 weeks’ service with you can make a request for flexible working if they have not made a similar request in the last 12 months. They should make the request in writing. There is no requirement to make the request due to caring responsibilities, the request can be made for any reason.

The request can be to have flexibility in the hours of work (e.g. to move to part-time working), the place of work (e.g. to work from home) or the time of work (e.g. to alter the start or finish time of work).

You are required to consider the request, and to respond within three months of receiving the request. If you are going to accept the request you can just tell the employee, and then confirm the agreement in writing. If you are not sure whether the request is feasible you should meet with the employee and discuss it. The employee does not have a legal right to bring a colleague or trade union representative to the meeting, but it would be good practice to allow this.

You can refuse the request on the following grounds:

If you agree to a change, make it clear to an employee that this is a permanent change of contract, and the employee has no right to return to their old pattern of working at some time in the future. You might agree to consider such a request but make it clear that there are no guarantees.  

If an employee has a short-term difficulty (maybe just needing some flexibility due to childcare responsibilities, until the academic year starts) it would be best to agree a temporary change of contract, rather than going through the formal request for flexible working.  

Action: When considering a request for flexible working it is recommended that you think ahead and consider what will happen if several employees make the same request. Would it be useful to pre-empt that and offer a changed working pattern to all employees?

It is usually a good idea to agree a change with an initial trial period. This gives both you and the employee the opportunity to see if the flexibility works, before making any change permanent.

Before you refuse a request, it would be a good idea to contact us to discuss. The Employment Tribunal cannot ‘second guess’ your decision and say that you should have accepted a request for flexible working, but they can instruct you to pay the employee up to eight weeks’ pay if you have not followed the procedure correctly. 

Further support for your employees 

In these unprecedented times, more couples may find themselves facing additional stresses that may be affecting their relationship. Should one of your employees find themselves struggling with relationship difficulties, our specialist Family Law Team can provide support and expert advice whether they are unmarried or married. The highly experienced team offer a free initial consultation and no issue is too complex or too small. 

Please do contact Jane Ingleby on 0113 336 3354 or at jane.ingleby@clarionsolicitors.com.