Imposing New Employment Contracts

Following months of turmoil and unrest, Justice for Health, a campaign group representing junior doctors, has lost its case that the Health Secretary (Jeremy Hunt) had over reached his powers by ostensibly imposing a new contract on junior doctors in England. The High Court found that Mr Hunt’s actions did not lack clarity and transparency, as had been alleged, and that he had not acted irrationally in pushing the new contract. What has, however, been clarified is that although Mr Hunt has approved the new contract, he is not imposing it on junior doctors and it is for employers to decide whether or not to adopt it. We will have to wait and see what this means in practice as the new contract is not due to be rolled out until November 2016.

The NHS is a unique organisation but it is not alone in wanting to make changes to terms and conditions in response to market forces and changing business needs. It is always open to employers to negotiate changes to terms and conditions with their employees who can decide whether to accept or reject them. Where agreed, any changes should be recorded in writing and signed by both parties. However, agreement – particularly when an employee is being asked to agree a reduction in their pay – is not always possible which means that employers would need to consider terminating an employee’s contract of employment with the offer of re-engagement on different terms and conditions. This is not, however, without risk.

Once an employee has worked for an organisation for two years, he or she has the right not to be unfairly dismissed. This means that an employer must have a potentially fair reason for dismissing an employee and must follow a fair and reasonable process prior to taking the decision to dismiss. Terminating a contract - even where re-engagement is offered – still amounts to a dismissal thereby opening up the employer to the risk of a claim. It is, therefore, extremely important that professional advice is taken before any changes are implemented it order to mitigate this risk.

Any change – even those introduced with employee consent – can be unsettling and impact on morale and productivity. Employers will, therefore, need to consider strategies to keep staff motivated and engaged in the business following any reorganisation.
If you would like advice on changing terms and conditions or are affected by an employer’s decision to change terms and conditions, please contact Debbie Sadler on 0118 955 9607 or at d.sadler@hewetts.co.uk.

Published on 29/09/2016