What an Employer Needs To Know About Consulting Employees When Changing Employment Contracts in England

While you and your employee will agree to certain rights and obligations upon signing the employment contract, there may be times when you need to alter the terms of your employment contract. Where this occurs, you should consult with your affected employees about the proposed changes to their employment contracts. Furthermore, you may need to consult the trade union as their representative. This article will explain what you, as an employer, need to know about consulting your employees before changing employment contract changes in England. 

What Does Consultation Involve When Changing Employment Contracts?

Once you give your employees initial information about the proposed changes you intend to make in their employment contract, you should engage in consultation. Consultation is a conversation with your staff about the proposed changes you wish to make to reach an agreement. 

Consultation involves:

• asking your employees for their thoughts on the proposed changes;
• answering your employees’ questions and concerns;
• listening to your employees’ objections to your proposal;
• considering any suggestions your employees raise; and 
• thinking about potential changes to your proposal as a result of your employees’ thoughts.

Why You Must Consult Employees Before Implementing Changes

You must consult your staff and any representatives they may have about your proposed employment contract changes. This increases the likelihood that your staff will agree to the changes you propose to make to their contracts. A consultation allows you to demonstrate that you have:

• helped your staff to understand why you want to make the proposed contract changes;
• allowed your staff to express their concerns and opinions; and 
• considered the thoughts of your staff when implementing the changes.

By carrying out consultations, you can:

• create mutually-beneficial solutions;
• gain helpful information from your employees about their job roles;
• improve working relationships;
• foster trust between you and your employees;
• reduce the negative effect of uncertainty amongst staff about the changes, which can help them to keep working productively;
• reduce the chance of tensions; and 
• ensure a fair and reasonable procedure when implementing employment contract changes.

How To Consult Employees About Employment Contract Changes

When consulting employees about proposed employment contract changes, you first need to know who to consult. Generally, you should consult directly with your staff through meetings and possibly individual meetings with the staff concerned. 

However, if you have a collective agreement in your business, this will likely state that you should consult with your employees’ trade union. While some staff may not be trade union members, the concerned staff are the ‘bargaining unit’ in your consultations. In this sense, the trade union will collectively bargain with the bargaining unit and agree or not agree to the proposed changes you are making on their behalf.

Where your proposed employment contract changes concern areas covered by an information and consultation (ICE) agreement in your business, your consultation should be with the elected representatives in this agreement. The same applies if you have any other type of agreement in your business to consult representatives rather than directly with staff on specific areas of change. For example, you may have a:

• joint consultative committee; or 
• a pay review forum.

Regardless of who you consult with, you should have a discussion where all parties can express their views and listen to each other. As an employer, you must take views seriously and ensure you answer questions as best possible.

What To Avoid When Consulting for Employment Contract Changes

When carrying out consultations for employment contract changes, there are some actions you must avoid taking.

1. Unlawful Discrimination

You must involve all affected staff when consulting employment contract changes. This includes those who may be absent such as when they are on sick or maternity leave. Not including all affected staff could be unlawful discrimination.

2. Being Inflexible

You may find that staff are opposed to your employment contract changes. Therefore, you should remain open-minded to finding alternative or varying solutions rather than sticking rigidly to the original proposed changes.

3. Threatening or Intimidating Behaviour

You should never try to get an agreement for proposed contract changes by threatening or intimidating those concerned or their representatives.

What is the Effect of Not Consulting Correctly?

If you fail to conduct effective consultations with staff and their representatives, it can adversely affect your business. Firstly, you risk legal action, such as a breach of contract or a claim for constructive dismissal. 

Secondly, not consulting effectively can:

• affect the likelihood of your employees agreeing to your proposed changes;
• cause stress to your employees;
• harm staff relationships, morale and productivity;
• damage your reputation; and 
• cause industrial actions amongst your staff.

Key Takeaways

If you propose certain changes to your employment contracts, you must consult with those affected by your proposal. Consultation involves open discussions about your proposed changes. In this sense, consultation allows staff to understand the changes and reach a consensus about the change. When conducting the consultation, you should avoid unlawfully discriminating against employees and intimidating staff or their representatives into agreeing to the changes. You should also avoid making changes without consultation, considering this can lead to legal claims for breach of contract.

If you need help understanding consulting for employment contract changes in England, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.

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