Now this term isn’t a new one but has most definitely bounced onto the discussion boards of many companies and HR teams over the last few weeks following the shock announcements from P&O Ferry’s. It’s typically used when companies need to make significant changes to statutory terms and conditions of an employment contract.
This is not usually something that is entered into lightly by companies, and there MUST be a genuine business reason for this change. It is usually brought about once all other avenues have been explored, and a last option.
The P&O announcement has triggered the Government to push through its new Statutory Code of Practice. This is something that has been in the pipeline for a few years and has been escalated through by recent events. At present we’re unsure when it’ll come into effect, it’s unlikely however to have any new legislation or laws attached to it, as they’re covered in employment and case law at present.
It’s likely that it will be more in the way of guidance on what companies should do in these cases, the steps that should be followed, and how. Here’s a closer look at the typical process and what should be followed:
- Communication – Begin with being open and clear on the proposed changes, give the reasons on why you need to make then, and try to get employees buy in
- Collective Consultation – This is only required if 20+ employees are affected by the changes.
- Confirm the changes – Give the specifics on the changes to individuals, spelling out what this means to them personally. It’s here you really want to try and get their agreement to the changes.
- No Agreement – If you’re unable to get agreement at this stage you’ll need to carry out individual consultations and understand what objections are raised. Its best at this stage to try and look for compromises, be constructive look for alternate roles, perhaps give more time to consider and try and come to an agreement together.
- Still no Agreement – Be clear about the impacts to them, warn of the termination of their contract
- Notice – If you’re unable to reach a compromise or agreement now, you’ll need to issue you employees with notice of their contract termination and at the same time issue an offer to re-engage on the new terms and conditions.
- Right of Appeal – Each affected employee has the right to appeal the decision to terminate their contract
- UDL Claim – Each employee will have the right to bring about an unfair dismissal claim in these cases, subject to qualifying service with the company (2 years min).
It is so important that as a company you do everything you can to engage with employees as early as possible. These situations aren’t pleasant for either party and can be extremely emotional, the more open you are and clear with employees in the process the more likely you are to have a successful outcome.