Consultation for Changing Employee Terms and Conditions

Sometimes, businesses need to change employee contracts. This could be for various reasons including financial challenges, organisation needs, client demands, or legal requirements. However, making changes without talking to employees first can lead to legal issues and unhappy staff. That’s why a proper consultation process is required.

Why Consultation is Essential

Employee terms and conditions refer to the fundamental components of a contract, including salary, working hours, job responsibilities, location, and other work-related benefits. These terms form the basis of the employment relationship.

In most cases, contracts can’t be changed without the employee agreeing unless there’s a clause that allows it (THSP’s contracts have this clause). If unions are involved, their input may also be required.

How Should Employers Approach Consultation?

Be Clear About the Changes: Employers should be upfront about why they are considering making changes to terms and conditions. Transparency is key. Explaining the reasons behind the change – whether it’s to improve business operations, adjust to financial constraints, or other reasons – helps employees understand the situation.

Give Employees Time to Digest: Consultation isn’t something that can be rushed. Employers should give employees enough time to consider the proposed changes and respond thoughtfully. This includes holding meetings, sending out emails, or having one-on-one discussions. Rushing the process might result in employees feeling overwhelmed or pressured.

Listen to Feedback: The consultation process is a two-way street. Employers should not only explain the changes but also actively listen to employee feedback. This means creating an open environment where employees feel comfortable voicing their concerns or suggesting alternatives. Employees might have ideas that employers haven’t thought of, and listening carefully can prevent problems down the line.

Be Open to Negotiation: Sometimes, the changes proposed won’t work for everyone. Employers should be flexible and willing to negotiate where possible. This could mean adjusting the proposed changes to address employee concerns while still achieving the intended business goals.

Keep a Record: Documenting the consultation process, including feedback and any changes made as a result, helps ensure that both parties have a clear understanding of what was discussed and agreed upon. It also provides a record in case of any legal disputes or misunderstandings in the future.

What Happens if Employees Don’t Agree?

One of the biggest concerns when changing terms and conditions is what happens if employees don’t agree with the changes.

While some employees may accept the changes willingly, others may resist or even refuse to comply. This is where the consultation process becomes even more crucial.

If employees disagree with the changes, employers should look for solutions that work for everyone, or at least come to a compromise. This could mean adjusting the changes, offering extra support, or finding alternative solutions that meet both the company’s and employees’ needs. In some cases, employees may need to be offered a choice—such as accepting the new terms or potentially facing termination of employment—but this is the last resort and should only come after a thorough and fair consultation process.

Potential Risks and How to Mitigate Them

Legal Claims: Employees may claim constructive dismissal if changes are imposed without agreement. To mitigate this, employers should ensure transparency, fairness, and proper consultation.

Employee Resistance: Resistance can lead to reduced morale and productivity. Open dialogue and compromise help in gaining employee buy-in.

Reputational Damage: Unilateral changes may harm an organisation’s reputation. Ensuring a fair and legal process helps maintain goodwill among all affected.