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New Year's Resolution: Changing Terms and Conditions

Jan 13, 2017
Given the difficult trading conditions that we have seen over the last six months following the Brexit vote, many businesses have been looking at ways to improve their profit. 

One option is to review existing arrangements for salary reviews, perhaps imposing a pay freeze for the next 12 months, a ban on recruitment unless absolutely necessary and restructuring to improve efficiency, which can result in redundancies. 

Another option for businesses that regularly make commission and bonus payments could be to review these and make changes to reduce the amount that employees are paid. However, unfortunately it is often not that simple. The terms for such payments are often included in employment contracts and, if so, cannot usually be changed without employee consent, otherwise it would be classed as a breach of contract. 

If you can demonstrate that the changes are for a business need then you could commence a period of consultation with employees and explain the reasons for the changes, for example that it could avoid the need to make redundancies. You could also make a one off payment as an incentive for them to agree to the changes. 

However, ultimately if they still refuse to agree (which they may well do if it results in them being worse off financially) and you still want to go ahead with the changes then you could look to terminate their employment and offer re-engagement on the new proposed terms and conditions. 

You should always take legal advice before doing so in order to ensure that you are following the correct procedure and protecting the business as far as possible against claims from disgruntled employees. 

Gary Smith

About the author

Gary Smith

Gary joined Nockolds in 2007 and is a Partner in our Employment Law Team. Before joining the firm Gary studied law at the University of Kent. ...

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