A company may be unwilling, for legal or employee relations reasons, to impose the change it needs. However, it may also be unable to obtain employees' agreement to the change. In these circumstances, the company has the option of implementing the change by terminating employees' contracts of employment and offering them new contracts on the revised terms. Employees may expressly accept the new contracts. If they do not, they may by implication accept the new terms by turning up to work after their original contracts have ended.
A company that adopts the 'clean break' approach of introducing change by dismissing its employees and offering them new contracts avoids the potential claims of breach of contract and unlawful deductions from pay that come with imposed change. The company could still, however, face claims for wrongful or unfair dismissal. It is important to note that these claims could be brought by employees who accepted the new contracts as well as by those who did not. There may also be a legal requirement to consult the affected employees' representatives and notify the Department for Business, Enterprise and Regulatory Reform if 20 or more employees are involved (collective consultation).
To avoid liability for wrongful dismissal, the company must give each employee proper notice of the termination of his or her original contract. If it wants to avoid allegations of unfair dismissal, the company must also ensure that it acts reasonably in terminating the employees' original contracts. The steps that an employment tribunal might expect a reasonable employer to take are discussed elsewhere in this Guide (demonstrating reasonableness ). The company might also need to comply with the requirements of the statutory minimum dismissal procedure ( minimum dismissal procedures ), although these requirements will not apply if the employer is preparing to dismiss in order to introduce new contract terms for 20 or more employees, or for entire categories of employees.