How Should Nursery Managers Go About Changing An Employee’s Contract?
Changing economic circumstances for the boss, new responsibilities at home for employee – there can be many reasons for changing an employment contract, but how easy is it to do? HR consultant Vicky Stanton takes a closer look…
An employment contract is the lawful agreement between employer and employee. The contractual terms are not always written on paper, although a lot will be – particularly with regard to hours, pay and holiday entitlement. There may, however, be many terms which are by verbal agreement.
Over the years of employment, you may have agreed to changes requested by employees, such as an employee asking if they can start work later on a Friday. If you have agreed to this, then there is a variation to their contractual terms.
Making alterations
At some point, either party bound by a contract of employment may want to change it. For example:
• An employer may want to reorganise the business due to economic circumstances, which might mean changing working hours or pay
• An employee may seek improvements in their pay or holidays, or want to change the hours they work due to their domestic responsibilities
An existing contract of employment can be varied, but it’s important that as an employer you follow the correct procedures. It can be varied only with the agreement of both parties. Changes may be agreed on an individual basis or through a collective agreement – i.e. agreement between the employer and employee or their representatives, such as trade unions or other workforce representatives. If you are proposing to change an employee’s contract of employment, you should fully consult with that employee or his or her representative(s) and explain and discuss the reasons for the change. Employees are far more likely to accept changes if they can understand the reasons behind them and have an opportunity to express their views. Variations to the contract can be agreed verbally or in writing. It is preferable for any agreed changes to be recorded in writing, for the avoidance of any doubt going forward. If the changes agreed concern particulars that must be included in the written statement of terms and conditions, the employer should give written notification of the change to the employee within a month of the change taking effect.
Note: Your contracts may contain express terms that allow the employer to make changes to employees’ terms and conditions. The flexibility clauses may be quite specific, or they may include a general power to allow the employer to change the contract terms.
However, it’s always better to consult with your employees, even if you have the ‘right’ to change terms and conditions, and I would recommend seeking legal advice if you intend to rely upon the flexibility clause to vary employees’ terms and conditions.
Sticking points
If you cannot reach agreement with your employees, you can serve notice to terminate the existing contract and offer the employee re-engagement on the new terms. This should be considered only after full and thorough consultation with employees and their representatives, and treated as a last resort.
By doing this you will be dismissing the employee – and it is important that you follow a fair dismissal process and offer the employee the right of appeal against their dismissal. Your employee may make a claim to an Employment Tribunal for unfair dismissal. It would then be for the Employment Tribunal to decide whether or not the dismissal was fair or unfair. Proper notice of the termination of the contract will be as specified (or implied) in the employee’s contract, or the minimum statutory notice period – whichever is longest. Whilst you would not be breaching your employees’ contract by doing this, your employees could claim unfair dismissal if they have the qualifying length of service to do that.
Good practice tips
• Keep talking and consult with employees This helps maintain levels of productivity and engagement
• Follow your internal policies Employees should raise formal grievances with their employers if they are not happy with a variation in their contract
• Consider all the options Reaching a compromise is the best way of preserving good employment relations at work.
Seek advice If you’re planning to make changes to your employment contracts, consider seeking professional help or speak to ACAS.
HR 4 Your Nursery is a professional HR consultancy working with setting owners and managers to take the challenge out of people management; for more information, follow @vicky_stanton
