Understanding the law in relation to
reorganisation and the methods and procedures that need to be used, but must be
seen to be carried out fairly and lawfully.
Varying a contract of employment
In a situation where an organisation may wish
to relocate some of its staff to another site, due to a site closure/
relocation of business then a variation in contract needs to be discussed. The
first step is to make contact with all employees affected in the hope to come
to an agreement – if all staff are happy to accept, a new agreement will be
The Trade Union and Labour Relations
(Consolidation) Act 1992 provides information that representatives should
receive in writing from the employer for consultation to commence. Details of
this will include the reasons for this. All information provided to employees
must be adequate and the agreed selection process followed.
Consultation during a varying of contract is
crucial for it to be seen as fair and should last for a specified time,
depending on the amount of employees involved:
or less employees – no time limit
employees – at least 30 days
employees – at least 45 days
Consultation should be carried out within the
above specified times, explaining the causes for the changes and discuss any
concerns employees may have.
If the changes aren’t agreed upon, the
employer has three options available to them. The first is to go ahead and make
the changes; however this can cause claims of constructive dismissal claiming
breach of contract. The second is to dismiss staff and rehire them on the new
terms and conditions, but again this can result in employees bringing unfair
dismissal claims against the employer, or the third would be to stop all
changes (ICS Learn).
To protect themselves when anticipating
change, employers sometimes include mobility clauses into contracts of
employment. However, if the change is not seen as practical an employee may decide
to claim unlawful variation of the contract. As illustrated with the United
Bank v Akhtar (1989) case, an employee was provided with a 6 day notice period
to relocate from Leeds to Birmingham. The relocation was objected due to the
limited notice provided and as a result, a claim of constructive dismissal was
ruled in his favour by the courts as a breach of the contract.
Redundancy situations occur when an employer
needs to reduce its staff numbers due to economic reasons. Specific requirements
must be followed by the employer to avoid claims of unfair dismissal. The law protects
the rights of all those employees with at least two years’ service, allowing
them the right to receive compensation if a dismissal occurs.
Criteria used to decide what individuals are
at risk of redundancy must be objective, providing a transparency of a fair
selection process, free from any discriminatory factors. All those individuals
considered for redundancy must then be notified in writing and invited to a
meeting to discuss.
The law also permits all employees with at
least two years’ service; time off to look for other employment.
The Transfer of Undertaking (Protection of
Employment) Regulations 2006 main requirement is to provide protection during
the transfer period during situations when an organisation sells all or part of
its business. The security applies to the entitlement of employees transferring
over on the same terms and conditions as before and continuing their employment
from one employer to another.
During a TUPE situation employers are again
required to consult with employees regarding the transfer within a reasonable
timeframe and advised on when the transfer is likely to happen and the reasons
for this. Consultation over possible implications for the employee must be
discussed, along with the measures the new employer expects to take in relation
to employees. If the consultation process is unsatisfactory, an employee can be
granted a protective award by the Employment Tribunal of up to 13 weeks’ pay