1. Purposes and aim
The purpose of this procedure is:
· to ensure the company follows a fair procedure when wishing to change (or amend) the terms and conditions of employment.
Whilst the aim of this procedure is seek employee agreement to such changes; in some instances this may not be possible and termination and re-engagement on new terms and conditions may be an outcome of this procedure.
2. General principles
Prior to entering into consultations with employees regarding changing terms and conditions, the Company will:
· undertake a thorough review to assess why the change is necessary, ensuring they can demonstrate reasonableness (see Appendix 1).
· determine whether the changes:
1. will require an alteration to an employees’ contract[i]
2. involves the Company using a power it already has (under a term in the employees contract) to implement changes.
3. falls within the scope of management’s right to set workplace rules, procedures and standards.[ii]
The Company will aim to seek employees’ agreement to changes. Agreement can be obtained either through negotiation with a recognised trade union and/or elected employee representatives or at an individual level through the consent of each employee.
The Company will keep minutes of all consultation meetings. [iii]
3. Procedure
Consultation
Following the completion of a thorough review to assess why the change is necessary and the contractual impact of such changes, if the Company wishes to proceed with the proposed changes they must enter into meaningful consultations with the group of employees that the change will affect.
The consultations must:
· be entered into with an open mind;
· provide employees with clear information on what is being proposed and why;
· give employees adequate time to consider that information and to
prepare their responses;
· give proper consideration to employees’ responses, and take them into account when making a decision in relation to finalising the proposal.
Consultation is therefore a two-way process, involving a considered exchange of views between the company and workforce, rather than a one-way process of informing the workforce of what is going to happen.
In the event that the Company is proposing to make changes to 20 to 99 employees’ terms, consultation will take place for a period of at least 30 days before; if required, notice to terminate and re-engagement is served.
In the event that the Company is proposing to make changes to 100 or more employees’ terms, consultation will take place for a period of at least 90 days before; if required, notice to terminate and re-engagement is served.
Consultations to seek agreement to a change can be achieved through 2 possible routes:
1. Collective Consultations with Trade Unions / Elected Representatives
2. Individual Consultations
1. Collective Consultations with Trade Unions / Elected Representatives
If the Company recognises a trade union for collective bargaining, it may be able to secure the change it needs through negotiations with the union. The changes that the company agrees with the union will be binding on individual employees, provided that their contracts state that any collective agreements that the company may reach with the union from time to time will form part of their terms of employment. If an employee’s contract contains an incorporation clause of this kind, any changes agreed with the union will form part of his or her contract, even if he or she is not a member of the union or is vehemently opposed to the changes.
The company may decide to enter into collective consultations with elected employee representatives if an employee’s contract does not contain an incorporation clause relating to a collective arrangements. In such instances, any changes agreed with the union or elected employee representatives will not form part of his or her contract, and as such the Company should also enter into individual consultations with individual employees (see below).
2. Individual Consultations
If there is no incorporation of a collective agreement, an employee will not usually be bound by changes negotiated and accepted by a third party such as a union or elected representatives.
If a company does not recognise a trade union, or if it recognises a union but cannot secure the union’s agreement to the change it wants, it can approach employees individually for their agreement to the change. The company will write inviting employees to such consultation meetings.
Potential Outcomes of Consultations
Following consultations the potential outcome will be either:
1. agreement is reached
or
2. agreement is not reached
1. Agreement is reached
Any changes that the employee agrees to or changes agreed through a collective agreement should be confirmed in writing at the earliest opportunity, but in any event no later than one month after the change. In cases where there is no collective agreement the document should provide the employee with the opportunity to sign to say they accept the change and these records should be held on the employee’s personal file.
2. Agreement is not reached
Following a series of consultations meetings with the employee, if the company is still unable to obtain employees’ agreement to the change it has the option of implementing the change by terminating employees’ contracts of employment and offering them new contracts on the revised terms – however there are still risks associated with claims for wrongful and unfair dismissal.[iv] [v] [vi] [vii]
In such instances, there may be a legal requirement to notify the Department of Trade and Industry if 20 or more employees are involved.
If agreement can not be reached the following will apply:
· The Company will send the employee a letter setting out the company reasons for proposing the change, details of the change and confirm that, to date the employee has not agreed to such a change.
· The letter will also inform the employee that he or she must attend the meeting to discuss the matter and confirm the time, date and location of that meeting. Any employee who has difficulty understanding such a letter should ask the [HR Manager] for an explanation[viii]. The letter should provide the employee with a further opportunity to accept the change and clearly warn the employee that a possible outcome of the meeting may be that the Company gives notice to terminate their employment and then offer the employee re-engagement under a new contract of employment on new terms and conditions.
· Before the meeting, the employee should be provided with any relevant information and give the employee, together with any permitted companion (see below) a reasonable opportunity to consider his or her response to that information. An employee has the statutory right to make a reasonable request to be accompanied by a fellow worker or trade union official of his or her choice. The companion may put forward the employee’s case, sum up his or her case or respond on the employee’s behalf to any view expressed at the meeting. He or she may also confer with the employee during the meeting, but does not have the right to answer questions on his or her behalf, address the meeting if the employee does not want him or her to, or prevent anyone, including the employee, from making his or her contribution to the meeting[ix].
· Employees have the right to appeal against any termination and re-engagement. The statutory right to be accompanied (as detailed above) also applies to any appeal meeting.
· All meetings, including appeals, will be held at a reasonable time and place. An employee who has been invited to attend a meeting must take all reasonable steps to attend the meeting[x].
· The appropriate level of management (as detailed in the company disciplinary procedure) [together with a representative of the HR department] will conduct meetings[xi]. At the meeting, the Company will explain the role of all those attending on its behalf. The Company will then explain its case, the need for the change and what the proposed change is; along with giving the employee the opportunity to respond in full. At appeal meetings, the employee will present his or her reasons for appealing the decision and the Company will consider these.
· If matters come to light during the meeting which require further investigation, the Company may at its discretion, adjourn any meeting to enable further investigation to be carried out
· Any employee who is dissatisfied with a decision taken may appeal against that decision. Appeals should be in writing, setting out the reasons for the appeal, and should be delivered to [the Personnel / Human Resources department[xii]] within [5[xiii]] working days of the decision. The Company will then invite the employee to an appeal meeting, which will normally take place within 5 working days[xiv]. The appeal meeting may take place after the disciplinary decision has taken effect.
· The decision on the appeal will be communicated to the employee orally and in writing[xv] within [3] working days of the hearing. [The decision is final[xvi]].
· The Company does not permit the audio or video recording of any Company meetings.
[i] Terms can become part of an employee’s contract in many ways. Some terms of an employee’s contract may be agreed at the recruitment interview, others may be set out in the letter offering the employee the job. Many important terms will be set out in the written statement that the company provides to the employee of the main terms and conditions of his or her employment. Or the employee may have a comprehensive written contract that contains all the terms of his or her employment. It is important to bear in mind that some of an employee’s contractual terms may be found in documents such as the company’s statement of its policies and procedures, job descriptions, employee handbooks, and sickness benefit scheme and pension scheme booklets. It may therefore be necessary to explore whether these documents have in fact been expressly or impliedly incorporated into the employee’s contract, and whether their wording and all the surrounding circumstances indicate that the company intends to be legally bound by them. Companies that are unclear whether the change they plan to implement affects employees’ contractual rights may wish to contact their Association for advice.
[ii] Although contracts of employment define many important aspects of employees’ rights, they do not regulate every aspect of employment conditions. Employers still have a large degree of management discretion in how they manage their workforce. In particular, management has the right to set the rules on how employees should behave in the workplace and to prescribe the way in which jobs should be done. This is reflected in the fact that employees are under an implied duty to co-operate with their employer and obey its lawful and reasonable instructions, provided those instructions fall broadly within the scope of the employees’ duties as defined by the express terms of their contracts.
[iii] Even if the change that is proposed falls within the scope of a company’s management prerogative, it is nevertheless advisable for the company to consult with employees about the change before it is introduced. Proper consultation is a central element of good employment relations practice and is likely to be necessary to secure employees’ co-operation. Another good legal reason for consulting with employees about change is to ensure that the company meets its implied duty not to act in a way that breaches trust and confidence between itself and its employees. This is particularly relevant where the change involves new rules or working methods that are difficult for certain employees to comply with or require different skills. In order to maintain trust and confidence, it may be necessary to give employees support in meeting the new rule or to provide training in the new working methods.
[iv] Whilst the company might not need to comply with the requirements of the statutory minimum dismissal procedure (where all employees in a category are to be dismissed or if the change affects 20 or more employees – as the law requiring consultation on collective redundancies is deemed to apply) it is recommended that the safest option is to treat the dismissal as if the statutory procedures still applies.
[v] 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. 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.
[vi] As a last resort the company can impose the change and see what happens. Companies that are considering this option should therefore contact their Association for advice.
[vii] It is a common misconception that an employer can alter employees’ contractual terms simply by giving them a ‘notice to vary’ their contracts. In fact, if the employees have not agreed to the variation, a notice of this type does not alter their contract terms, but rather gives them advance warning that the company intends to breach their contracts, giving them the option of making the legal claims. Likewise, the mere fact that a company has issued employees with a written statement confirming that their contract terms have changed does not have the effect of altering those terms, if the employees have not in fact agreed to the change. In practice, however, employees who are issued with a ‘notice to vary’, or a written statement about a change, may be prepared to go along with the change and by so doing will have implied that they have agreed to it. Nevertheless, companies that are contemplating this course of action should contact their Association for advice.
[viii] This will be the Step 1 letter, in accordance with the statutory procedures. It is good practice to agree the time and location of a meeting under this procedure with the employee.
[ix] The Employment Relations Act 1999 confers the right to be accompanied where the employee is required to attend a disciplinary hearing and reasonably requests to be accompanied, the same applies for these meetings. The ACAS Code provides that employees should be advised of the right to be accompanied in advance of the hearing.
A disciplinary hearing is defined in the Act as ‘a hearing which could result in (a) the administration of a formal warning to a worker by his employer, (b) the taking of some other action in respect of a worker by his employer, or (c) the confirmation of a warning issued or some other action taken’. The definition appears to be wide enough to entitle witnesses to be accompanied. The right to be accompanied also applies to any meeting which is covered by the statutory procedures.
The definition of trade union official includes external officials of a union and shop stewards employed by other employers. (Lay union officials (shop stewards) must have received appropriate certification by their union.) The definition is not limited to unions recognised by the Company. The ACAS Code states that before the hearing, the employee should tell the employer who they have chosen to be their companion. It is suggested that it can sometimes be helpful for the employer to make contact with the companion before the hearing.
The ACAS Code states that it is good practice to let the representative participate as fully as possible in the hearing, including asking witnesses questions. It also suggests that employers should cater for any disability that the chosen companion has.
Under the Employment Relations Act 1999, if a worker’s chosen companion is unavailable at the time appointed for a disciplinary hearing but the worker proposes a reasonable alternative time in the next five working days, the hearing must be postponed to that time. If the worker is unable to propose a new date for the hearing within the next five days, then the hearing can go ahead after the expiry of the five days without the worker’s chosen companion. However, employers should exercise caution and act reasonably in the circumstances, given that it is possible that the lack of a companion at a hearing could still contribute to a finding of unfair dismissal by an employment tribunal. It would be good practice to check whether a worker who arrives at a hearing unaccompanied would like to be accompanied and, if necessary, to postpone the hearing.
[x] The statutory procedures require employers to hold disciplinary meetings at a reasonable time and place, the same applies to these meetings. Where the employee does shift work or works remotes in an isolated depot, this may create difficulties. The ACAS Code recommends that employers consider whether any special provisions are necessary for such categories of employees. The employer should take care to act fairly and reasonably in the circumstances. If an employee fails to attend a meeting through circumstances outside their control and unforeseeable at the time the meeting was arranged, the statutory procedures provide the employer should arrange another meeting. If the employee fails to attend the rearranged hearing, it may be possible to make a decision in their absence. We would recommend that employers are cautious about doing so and first take advice from their Association.
Where an employer or employee has reasonable grounds to believe that they will be exposed to a significant threat, such as violent or intimidating behaviour or they will be harassed, they do not need to go through the statutory procedures and would not have to attend a disciplinary meeting.
For further information about non-attendance at meetings or what to do when it proves difficult to arrange a time for a meeting, see the EEF Guide , Dispute Resolution – a practical guide.
[xi] Where possible, it is sensible to have a representative from the personnel department present to advise on procedural issues and to take notes. It is important that the roles of the representatives of management present at a disciplinary hearing are understood by all, including management. The chairman of the meeting should identify those present and their roles – in particular, which member(s) of management will take the disciplinary decision. If a representative of the personnel department is present, it must be clear whether he or she has merely an advisory role or will participate in the decision. At the start of the hearing, it is good practice to confirm that the employee knows and understands the disciplinary procedure and to answer any questions about it.
[xii] Amend to suit the Company’s organisation.
[xiii] The ACAS Code suggests that five days is usually an appropriate time limit. Employers should take care to deal with appeals as promptly as possible (see footnote 12). However, if an appeal is raised outside this time limit, before rejecting the appeal the employer should consider whether the employee’s delay is unreasonable.
[xiv] See footnote 21 for a discussion of timing of meetings and the circumstances when an employer should rearrange a meeting.
[xv] Employers should seek advice from their Association on the content of such a letter. The employee should be told the outcome of the hearing and the date from which it is to take effect.
[xvi] This is only appropriate where there is no further external stage. Where the appeal is the end of the procedure, employees should be informed that the decision is final.