Posted onSeptember 28, 2013
Food firms should be aware of the reputational and brand risks of using the “nuclear option” of dismissing staff and re-employing them on new contracts as a way of forcing through changes to employee terms and conditions.
That’s the view of Teresa Dolan, a partner at law firm Eversheds, who said that “dismissing and re-engaging” was often “banded around” as a way to change contractual agreements, but added she rarely recommended it.
Speaking at a seminar held at the Food and Drink Federation’s (FDF) headquarters in London, she added: “It is possible to take this approach and there have been some successful outcomes, but it can backfire spectacularly.
“In addition to legal risks, there are often brand risks, employee unrest and it can cause external customer concerns too when they hear about it, especially if they think it will impact on the service they receive.”
Dolan said it was always preferable for manufacturers to impose contractual changes – such as new working hours, shift patterns or job locations – through less inflammatory measures.
In an ideal situation, well-worded contracts will mean changes can be implemented without the need for “long-winded consultation processes”.
“This is why it’s crucial that a thorough sweep of all contracts and documents is the first thing any business does so it knows exactly what it’s dealing with,” she added. “If contracts are clear and are worded correctly, you can instruct your desired change to happen in line with it – this is where we’d always like to be.”
If this wasn’t possible, food firms should try to get “express consent”, in writing, for the proposed changes.
The process of “implied consent” – informing workers that a change would happen on a given date unless they objected – often worked well but it also had its dangers, she explained.
“This works on the basis of apathy and the hope that most people are too lazy to reply,” she told the seminar, attended by representatives from some of the UK’s leading manufacturers.
“The problem with this is that you have to be 100% sure they received the communication and, if it doesn’t have an immediate implication, that they have understood it.”
Where employee consent could not be secured through the employees themselves, or by agreement with the unions, and a firm decided to impose the change on employees by dismissing and re-engaging them, then they should be prepared for a long slog, she added.
A business with more than 100 employees would have to embark on a 45-day collective consultation period, followed by a 30-day individual consultation period before then seeing out the notice period of the old contract, before initiating the new one.
“In addition to the business risks stemming from employee unrest, from a resourcing perspective, this can be a mess. It is not a one person job and it certainly isn’t speedy,” she said.
Businesses also have to factor in issues like peak periods and operational requirements before committing to this lengthy process, Dolan told delegates.
“Regardless of the approach taken, when it comes to changing terms and conditions, you have to give yourself oodles of time to carry them out and, crucially, to properly plan them. Changes like these rarely happen overnight and, if they do, I can guarantee you are going to get plenty of come-back.”