Highly-paid employees in the service sector are no longer ascendant, as they have been for a long time, but must recalibrate their priorities to the raw requirement of keeping a job. Stability is being given a higher priority than variety, flexibility and self-autonomy.
The new realities mean employers are now running with the flexible working baton, not their workforce. They are able to impose sweeping changes on employment contracts, actions that would have been unthinkable only months ago.
Time and again we are also seeing evidence employees understand they must make often quite substantial concessions, the alternative being to risk finding themselves out of work for a considerable time.
This seismic shift in the employment market balance is an opportunity for businesses to re-organise themselves, not just for survival but also for increased growth when better times return. The challenge for an employer in the current fraught jobs market is how to retain their talent pool by working with employees to minimise compulsory redundancies.
How employers behave to those they employ now is crucial: demonstrating a sense of fair play will go a long way to ensuring that the retained workforce during the downturn will not hit the road at a time of their choosing once the economic climate improves.
There are key actions that employers seeking to impose basic changes to terms and conditions or to re-organise their business should undertake to smooth the journey.
- Identify strategic objectives and communicate these clearly to employees, explaining why they are necessary and what timeline is needed.
- When proposals to change contractual terms are being discussed, make sure a full draft of the proposed changes is available for review by all those affected.
- Consider a formal consultation, which may well be mandatory anyway if 20 or more employees are affected by changes and these include dismissal threats.
- Dismissing employees who refuse to accept contractual variations viewed as necessary to the business may be a defence against an unfair dismissal claim. The key for the employer is show that the reason was more than trivial or whimsical.
- Work out whether restructuring plans amount to re-organisation or a trigger for redundancy, which is quite different. Reshuffling duties among staff or enforcing changes to reduce costs, including pay reductions, is not redundancy. Care needs to be taken in establishing whether, if redundancy is taking place, any actual dismissal will be regarded as being by reason of redundancy.
- Ensure that consistent treatment is applied to all employees, including those on long-term sickness absence or maternity leave, to minimise the risk of a discrimination claim.
Employees often receive large awards at tribunal not because the employer has treated them badly, but because they are left out-of-pocket from having failed to secure alternative work. This makes it particularly important for employers to follow procedures and give due consideration to the actions detailed above in a recession. The price of not doing so may be high. Dismissing employees unfairly is likely to prove even more expensive in these difficult times.
Howard Hymanson is co-head of the employment group at Harbottle & Lewis
