Siobhain McDonagh, Labour MP, revealed that thousands of M&S staff could lose their jobs before Christmas if they don’t accept the terms of their new pay and pension’s scheme in their contracts of employment.

You might be thinking that this is an extreme measure and you would be right. But one thing to point out is that they aren’t really “firing” their employees. What they are doing is terminating their contracts of employment and offering them new contracts with the revised terms to commence immediately after the existing contract ends. Any who refuse the new contract will be dismissed.

This is a risky move. Contracts are binding agreements that require both parties to be in consent. If the employees suffer a loss then they can sue for breach of contract, unlawful deductions from wages and constructive dismissal. Not to mention the negative impacts on employee relations.

Here are some core points to follow to avoid the pitfalls of varying contracts of employment:

  1. Write flexibility into your contract – This doesn’t give you a free pass but it does allow you to make changes with more ease. The important thing is to make sure that the right to vary terms is clear to the employee, is unambiguous and is exercised with care
  2. Is it necessary? – Because of all the baggage that comes with altering contracts of employment ask yourself if it is really worth it. If it is, can you prove it? If you can demonstrate to your employees why this is important then they are more likely to agree to the changes and in the case of a potential dismissal, you can prove that it was a necessary change
  3. Discuss – If the change you want to implement is not covered in your flexibility clause you need to ask the employee for consent. The best course of action is a consultation process
  4. Always get consent to changes in writing
  5. If changes are made to the terms in the written terms and conditions, the employee must have a minimum of a months’ notice in writing
  6. Dismissal for refusing to agree to the new contract terms may result in the need for a collective consultation used for redundancy dismissals because the definition of redundancy in the collective consultation provisions has a wider scope than redundancy pay and unfair dismissal claims.
    • If 20 or more employees are dismissed within 90 days or less for not agreeing to the terms of the new contract, you are required to consult with the union or employee representatives.
    • The consultation must last for 30 days at least for 20 – 99 employees or 45 for over 100 before the first dismissal happens

If you need support with your contracts of employment or HR in general, then give us a call on 01256 328 428 or click the button below to organise a callback at your convenience.

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