The dispute at Grangemouth has highlighted a very real issue which many employers face, namely how to go about changing terms and conditions of employment if the existing terms are simply not affordable. Employers may be able to vary terms and conditions, but there are some key points which need to be noted:

  • Firstly, try to reach agreement. If you reach agreement, then agreed changes can be confirmed in writing and revised terms and conditions can be issued.
  • If the employees are putting forward alternative proposals, make sure you consider them. Any subsequent dismissal could be deemed unfair if the employees are able to show that alternatives were simply dismissed out of hand.
  • If no agreement can be reached, do you have overriding and genuine business reasons for the changes? If you do not, any subsequent dismissal could be unfair. What are overriding and genuine business reasons will depend on the particular business, though it will certainly be appropriate to take into account concerns relating to the viability of the business.
  • If you have adequate reasons, do you dismiss and offer new terms? This is essentially the step of last resort. You can potentially give due notice and bring the existing employment contracts to an end and offer new terms. That would amount to a dismissal, which may give employees the right to raise employment tribunal proceedings. However, as long as you have tried to reach agreement and taken on board any alternative proposals, and as long as you have overriding and genuine business reasons, you should be in a reasonable position to defend such claims.

Click here if you wish to hear Giles Woolfson on Radio Scotland speaking on this issue with Kaye Adams (scroll to 34 minutes):  (expires Friday 25 October at 10am)

Please let us know if you require any advice on any aspect of employment law.

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