Process for Company to Change Employment Contract?

pinkteapot

I have been permanently employed by my company for just over 3 years.

Rumours abound that our contracts are going to be changed. Specifically, we have various benefits that are written in to our contracts of employment and that these will be cut.

Does anyone know what the process is for a company to force a contract change onto an employee? I'm assuming that companies have the right to do this, but is there (legally) any process they have to follow in the UK?

It's a small company (UK limited company). We have no HR staff. Our contracts were written by the company lawyers.

Jarndyce

pinkteapot wrote: »

I have been permanently employed by my company for just over 3 years.

Rumours abound that our contracts are going to be changed. Specifically, we have various benefits that are written in to our contracts of employment and that these will be cut.

Does anyone know what the process is for a company to force a contract change onto an employee? I'm assuming that companies have the right to do this, but is there (legally) any process they have to follow in the UK?

It's a small company (UK limited company). We have no HR staff. Our contracts were written by the company lawyers.

They do not have the right to force a contract change on you. You could agree it, but you also have the right to refuse it. The question is what they would do then.

They will either offer to re-employ you on the new terms, or dismiss you (technically both are a dismissal). That could mean you are unfairly dismissed, but that would depend on the circumstances notably how necessary the contract changes were to the company's business operations. So in practice, if they want to do it, they probably will, and your only response is to refuse, risk dismissal and an unfair dismissal claim with questionable prospects of success.

saintjammyswine

If you dont take the new contract are you not effectively resigning?

pinkteapot

They want to cut some benefits that cost the company quite a bit of money, so I'm sure they can argue that it's necessary from a business standpoint (so if I was dismissed I wouldn't have an unfair dismissal claim). Will make me considerably worse off financially. Phooey. No confirmation that it's happening yet but they've muttered about these benefits for a year or two now and a company meeting has been called tomorrow.

Jarndyce

saintjammyswine wrote: »

If you dont take the new contract are you not effectively resigning?

No. They would have to dismiss you. Otherwise you are entitled to work on under your existing contract having refused the change.

saintjammyswine

Jarndyce wrote: »

No. They would have to dismiss you. Otherwise you are entitled to work on under your existing contract having refused the change.

OK thanks wasnt sure.

mountainofdebt

Of course the alternative is for the company to keep the benefits as they are and make redundant a number of the staff to effectively make up the difference.

I guess its the new russian roulette for the OP .

pinkteapot

The company is highly profitable. The owner is extremely well off. They don't need to cut costs, but what company doesn't want to?

It's reduced in headcount quite a lot since I've been here. We're really down to bare bones with staff now - each of us does a lot of tasks that no-one else knows how to do (ingenious setup from a business continuity perspective!).

Unfortunately if the benefits in question are cut it would be equivalent to a cut of 20% to my gross salary, so might then be time to look for something else anyway.

SarEl

Jarndyce wrote: »

No. They would have to dismiss you. Otherwise you are entitled to work on under your existing contract having refused the change.

Hmm - not technically entirely correct. The employer serves notice of the termination of the old contract and the introduction of the new contract (with full continuous service intact). If you refuse to agree the new contract then in law it actually is deemed a resignation, but it is the only area of employment law where a resignation may give rise to a claim of unfair dismissal rather than constructive unfair dismissal. However, you can in fact also "work under protest" - saying that you refute the changes as unlawful, have been unfairly dismissed, and are continuing to work under the new terms under protest. You can then lodge a claim for unfair dismssal whilst in employment - but need the skin of a herd of rhino's to do this, especially if you lose!

The process to begin this (which is what the OP asked about) says that the employer must consult the employees on proposed changes first before they can enforce them. Usually such consultation isn't very rigorous and consists of: "We want to introduce these changes", "No" "OK we'll enforce them" - but occasionally one can be pleasantly surprised by employers. I suppose it depends on what they want to change and how much they value their staff - it may be possible to negootiate a compromise...

patriciahelen

I dont think you have anything to worry about

Uncertain

patriciahelen wrote: »

I dont think you have anything to worry about

An interesting first post......

Do you own / run the company?