Understanding the law in relation to
reorganisation and the methods and procedures that need to be used, but must be
seen to be carried out fairly and lawfully.
Varying a contract of employment
In a situation where an organisation may wish
to relocate some of its staff to another site, due to a site closure/
relocation of business then a variation in contract needs to be discussed. The
first step is to make contact with all employees affected in the hope to come
to an agreement – if all staff are happy to accept, a new agreement will be
The Trade Union and Labour Relations
(Consolidation) Act 1992 provides information that representatives should
receive in writing from the employer for consultation to commence. Details of
this will include the reasons for this. All information provided to employees
must be adequate and the agreed selection process followed.
Consultation during a varying of contract is
crucial for it to be seen as fair and should last for a specified time,
depending on the amount of employees involved:
or less employees – no time limit
employees – at least 30 days
employees – at least 45 days
Consultation should be carried out within the
above specified times, explaining the reasons for the changes and discuss any
concerns employees may have.
If an agreement over the changes cannot be
made, the employer has three options available to them. The first is to go ahead
and make the changes, however this can leave them open to cases of constructive
dismissal if the employee resigns claiming breach of contract. The second is to
dismiss staff and rehire them on the new terms and conditions, but again this
can result in employees bringing unfair dismissal claims against the employer,
or the third would be to stop all changes.
To cover themselves when anticipating change,
employers include mobility clauses into contracts of employment. However, if
the change is not seen as ‘reasonable’ then the employee may be able to claim
unlawful variation of the contract. As illustrated with the United Bank v
Akhtar (1989) case, an employee was provided with a 6 day notice period to
relocate from Leeds to Birmingham. This move was protested due to the short
notice and as a result, a claim of constructive dismissal was ruled in his
favour by the courts as a breach of the contract.
Redundancy situations occur when an employer
needs to reduce its staff numbers due to economic reasons and no longer have
the funds to continue employment. Particular requirements must be followed by
the employer to avoid claims of unfair dismissal. The law protects the rights
of all those employees with at least two years’ service, providing them with
the right to receive compensation if a dismissal occurs. The amount will vary depending on various
Criteria used to decide what individuals are
at risk of redundancy must be objective, providing a clear view of a fair
selection process, free from any discriminatory factors. All those individuals
considered for redundancy must then be notified in writing and invited to a
meeting to discuss.
The law also permits all employees with at
least two years’ service; time off to look for alternative employment.