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Our employer wants to force through new terms and conditions by ending our employment contracts and offering new ones on poorer terms. Is this legal?
This tactic – dismissal and re-engagement – has been used by many large employers during and since the economic downturn to force through cuts to workers' terms and conditions.
Typically, the employer starts off by asking for agreement, but if employees refuse to agree, the employer gives notice to end the existing contract terms, at the same time offering a new employment contract which includes the new reduced terms and conditions.
As long as the employer gives the full amount of notice, this is not a breach of contract. By giving notice, the employer is performing the contract, not breaching it. Nevertheless, ending contracts in this way is a dismissal, even if employees accept the new terms under protest.
Speak to your rep about how best to respond. Remember, in particular, that:
- The dismissals may be fair or unfair. There is most likely to be a fair dismissal where the employer has a good business case for wanting to make the change and has consulted fairly. If there is a recognised union, the consultation should be with the union.
- The more employees who agree to a change, the more likely a tribunal is to find any dismissals for refusing to accept the change fair, so as always, solidarity is vital.
- Your employer owes duties under the Equality Act not to discriminate when forcing through change.
- Your employer must not breach fundamental contractual duties such as the duty of trust and confidence, and good faith, and the duty to explain changes properly.
- If 20 or more employees are involved, the statutory duty to consult collectively is likely to be triggered, putting your employer at risk of a protective award if they fail to consult properly with the union or with elected representatives if no union is recognised where you work. Speak to your union.
- It is against the law for an employer to offer an inducement (for example a cash bonus) to employees in return for giving up their collectively agreed terms.
If you are not a union member, consider joining a trade union and organising for union recognition where you work. Browse our Union Finder tool to find the union most suited to you. Unions are expert at negotiating changes to contract terms through collective bargaining.
Collective bargaining is the best way of reducing the inequality of bargaining power between individual employees and your employer during times of change and uncertainty. Through this process, the union can respond to the employer's proposals by negotiating the best possible deal for workers, instead of workers having the employer's desired outcome imposed on them without any say in the matter.