What exactly needs changing? Re-organisations and contract terms issues for HR

Published on: 04/05/2016


It is a frequent issue for HR that a decision is made to carry out some organisational change that impacts all or any of working hours, shift arrangements, rates of pay, duties to be carried out, and other similar matters that not surprisingly make employees feel unsettled or, in some cases, militantly opposed to the employer's plans.

It is generally a legal question what steps may be needed to implement such changes, and whether individual contracts or union agreements need to be altered by agreement or unilateral imposed change/new contracts.

However, HR in assessing the scope to implement changes, and how far they can go without contractual changes, need general understanding of the distinct categories of existing arrangements: 

  1. Working practices, which ought normally to be capable of reasonable unilateral change after appropriate consultations;
  2. Contract terms, which may or may not be subject to a contractual right to vary the terms, but in absence of variation rights may need to be terminated with an offer of a new contract;
  3. Collective agreements, express or implied by custom and practice, which very likely have some terms incorporated into individual contacts, meaning again that contracts may need to be terminated/new contract offered, carrying special risks of conflict with trade union rights. It pays to sort out what union agreements are in force and what they cover as good HR housekeeping, not waiting till there is a re-organisation to handle.

HR professionals need to be very alive to all possibilities when deciding what approach to take to consultations or union negotiations. It may worsen the employer's position if talks with unions or employees are opened on an assumption that contracts need to be altered when as a matter of law on the particular facts that may not be required. This may be later alleged an admission by the employer that it cannot vary the contracts or work practices.

The other side of the coin is the error of talking for a long time about making changes without appreciating there needs to be a formal statutory consultation, opening up protective award risks and of course possibly causing a detrimental delay when it is realised that a genuine and thorough legal consultation process has to be formally established and completed first.

In short, getting the facts clear at the outset is the thing to do. HR professionals will be relied on to do that and steer the process down the right pathway. Even legal input will be inadequate till the issue has been properly tested as to what the employees' contractual rights are and where they come from.

The best tip is to know contract flexibilities, or lack of, at all times and not just when you really need to know!

Michael Sippitt


Forbury People Limited


This information is for guidance purposes only and should not be regarded as a substitute for taking professional and legal advice. Please refer to the full General Notices on our website.