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What are employer and employee rights when management changes?

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Related tags: Contract

Changes to staff shifts are restricted by contractual terms
Changes to staff shifts are restricted by contractual terms
Management change in the hospitality sector often comes along with a new approach to employee shifts and benefits. But what rights do employers and employees have in this situation? Caroline Essex, employment specialist at the law firm Davenport Lyons, helps set the record straight.

Problem:​ “I am a member of a new committee which runs a social club. Due to retirement and other departures there are no members of the previous committee remaining at the club. We want to reduce the length of shifts to five or five-and-a-half hours for our bar staff. Can we do this quite easily and would this affect the staff’s entitlement to rest breaks?

Additionally, the previous committee would allow members of staff to take cigarette breaks on an ad hoc basis. It was never a formal part of the agreement between the club and the staff. We now want to remove these so that employees are only entitled to their statutory breaks. Again, can we do this?”

Contractual terms

Solution: ​The contractual terms governing shift patterns will be expressly set out in the contract of employment. Changes to these terms will have knock-on effects to pay as employees will have to work more of the shorter shifts to maintain the same hours and level of pay. Your proposal clearly amounts to a significant change in contractual terms and conditions.

Employers cannot unilaterally change contractual terms without facing potential Employment Tribunal claims. You can make amendments to the contract of employment only if the change is authorised by the contract, or if your employees agree.

It is unlikely that a contract will contain a clause that authorises unilateral amendments to working hours (at least not one that would be enforceable). You could impose the changes unilaterally and leave it to your employees to decide how to respond (risking claims for constructive unfair dismissal).

However, the most practical option is to seek consent from your employees in writing and, if this cannot be achieved, dismiss those who refuse and offer re-engagement (following the contractual notice period) on the new terms. It is then up to the employees whether they accept the offer, or pursue a claim for unfair dismissal.

Dismissal

In order to minimise the risk of successful unfair dismissal claims being brought, you should consult with your employees over the proposed changes, the reason for the changes and the impact that this will have on them.

Only if consent is not obtained following consultation should dismissal and re-engagement be contemplated. If consent is obtained, the variation should be recorded in writing by each employee. You may also be advised to introduce this change in conjunction with a pay review or perhaps an extra day’s holiday as consideration for the change.

If the proposed changes may result in the dismissal of 20 or more employees, then you must formally consult with employee representatives’ elected by the staff. If a claim is brought, the reason for dismissal will be SOSR, or alternatively, redundancy (on the basis that the need for employees to work longer shifts has ceased or diminished). From the facts, however, it appears unlikely that you would have that many bar staff.

Smoking breaks

With regards to smoking breaks, employees may try to argue that the entitlement to ad hoc breaks is also a term of their contracts (incorporated through custom and practice).

However, this would be a difficult argument to sustain as the agreement with regard to breaks lacks certainty. It seems likely that you could unilaterally impose this change. In any event, it might be worth notifying the employees of the proposed change and giving them the opportunity to comment, even if it is then changed unilaterally.

The WTR states that workers are entitled to a 20 minute break if they work for more than 6 hours. If you successfully reduce shifts to five or five-and-a-half hours then your employees will not be entitled to a rest break during their shift.

A rest break does not have to be paid, but you may find that if you were willing to offer one paid break during a five-hour shift, they may be more inclined to accept the proposed changes. You can explain that you are under no obligation to offer this, but you are doing so in fairness to them.

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