The document discusses various topics related to restructuring a business and making changes to employees' terms and conditions, including: 1) Employers need to change how work is done as products/services change, but must follow proper procedures when making changes. 2) Changes that can be made include management structures, work allocation/amount/timing/location/type, and contracting out work. 3) Employers must consult with employees when making significant changes like restructuring, redundancy, or changing terms/conditions of employment. Failing to properly consult can result in penalties.

1. Employment Team Hereford Breakfast Meeting
Thursday 11 September 2014
“All Change”
Restructuring, Redundancy and
Changing Terms & Conditions
Michael Stokes, Partner and
Rebecca Kirk, Solicitor
Employment Team

2. All Change
• Nothing stays the same
• The way work is done changes every time products
or services change
• Employers have to keep up with those changes

3. What can Change?
• Management Structures
• Allocation of work
• Amount of work
• Timing of work – working days and hours
• Location of work
• Type of work
• Contracting out

4. What are you starting with?
• Contracts of employment?
• Job descriptions?
• Person specifications?
• Handbooks?
• Management structures – Teams – Departments
• Current practice – “the way we do things”

5. Restructuring
• Can be used to describe a lot of different kinds of
change
• Sometimes used as a euphemism for redundancy
• Changes to tasks, status, pay, hours ….
• Will it end in redundancy?
• Is consultation or agreement required?

6. “Organic” Change
• Possibly the norm
• Change can be so gradual that it goes unnoticed
• Can work perfectly
• But can leave documents out of date
• Can create uncertainty
• Danger of an employee referring back to old contract

7. Planning for Change
• Are changes to contracts needed?
• Can you get by without changing the contract?
• Individual consultation?
• Collective consultation?

8. Changing Terms and Conditions
• Any change requires the agreement of both parties
• But agreement can arise in many ways
• Explicit agreement
• Prior agreement – where the right to vary is in the
contract itself
• Collective agreement
• Acquiescence – doing nothing after a unilateral
variation
• Dismissal and re-engagement

9. Consultation
• Good practice to talk to your workforce – of course
• If you might need to dismiss and re-engage 20 or more
employees, you are required to carry out collective
consultation
• Dismissals that are to effect changes to contracts are
treated as if they are redundancies for statutory
consultation purposes – where 20 or more are involved
• Big penalties for failure to consult

10. Changing Terms – Agreement or Not?
• Always worth trying to agree changes by way of
consultation, explanation, offer and acceptance
• Once signed, the new contract is binding and
there is no dismissal – so can’t be unfair
• If they won’t accept, there are a few options but
the ultimate option is to give contractual notice
and offer to re-engage them on the new terms

11. Dismissal and Re-engagement
• If you give notice of termination and offer re-engagement,
you are still dismissing the employee
• You have to be careful to avoid unfair dismissal claims
• Even if the employee agrees to the new terms, they
can still make a claim
• You need to have a compelling reason to make the
change and to have followed a fair procedure

12. Taking a Chance
• Employers sometimes just make changes and either don’t
know there might be a problem or are willing to take a
chance
• If the employee does nothing, they can be taken to have
accepted what would be the breach of contract by the
employer in making the change
• The employee can reserve their position by making a
protest at the time, or they might resign and claim
constructive dismissal

13. Redundancy
• If your restructure involves less work being done or
the closure of part of your organisation, you are
considering dismissing one or more of your
employees for redundancy
• It is open to you to offer your workforce less
favourable terms or fewer hours in order to avoid
redundancies
• This will not always solve the problem

14. Redundancy
• A talk all on its own
• Consider who might be at risk of redundancy
• Consultation
• What is your pool for selection?
• Is anyone “self-selecting”?
• How are you going to choose who to make redundant?
• Selection criteria

15. Redundancy Consultation
• Collective consultation if 20 or more being dismissed
within a period of 90 days
• Collective consultation needs to commence at least
30 days before giving notice if 20-99 employees
involved, 45 days before if 100+
• Need to tie in with individual consultation – carried out
as part of dismissing employees fairly
• Get advice and have a plan!

16. Redundancy Selection
• Self-selection of those in unique roles – are you sure?
• Include your selection criteria as part of your redundancy
consultation
• Think about what you are trying to achieve
• What qualities are you looking for?
• Formulate criteria accordingly
• Try to avoid subjective criteria – where is your evidence?
Keep it objective

17. Redundancy Selection Criteria
• Attendance – but watch out for disability
• Service – can be discriminatory on grounds of age but ok if
part of a range of criteria – LIFO is out
• Disciplinary record
• Skills/Flexibility
• Performance – how is it measured?
• “Attitude” – be careful!
• Are your criteria capable of operating fairly, and are you
applying them fairly?

18. Contracting Out - TUPE
• Another talk on its own!
• If your restructure involves you transferring part of
your business to someone else, or having one of
your functions carried out by an outside contractor,
you are potentially heading for a relevant transfer
under the Transfer of Undertakings (Protection of
Employment) Regulations 2006

19. TUPE
• Get some advice!
• Consultation obligations
• In a relevant transfer, affected employees would
expect to transfer to the new owner/service
provider with all their terms and their service intact
• Pensions are dealt with separately in a TUPE transfer
• Employees who do transfer are not dismissed by you
– so no unfair dismissal and no redundancy

20. Tidying Up
• Once you have been through a reorganisation,
consider your documents
• Do you need to modernise contracts or make them
tally with the new arrangements?
• Does everyone know what the new structure is and
what their place in it is?
• If you’ve “gone organic” – think about new job
descriptions (if you had them in the first place)

21. QUESTIONS

22. Thank You