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Cancellation of public events, closure of theatres, clubs, etc. All these have implications for contracts of employment. These implications affect employees who would otherwise be involved in providing for the demand. Employers often worry about constructive dismissal claims if they vary contracts of employment….

The context of this blog has changed and should be read in conjunction with:

Covid-19 furloughed workers

In fact, for an employee, a constructive dismissal claim has quite a high bar if it is to succeed. Back in the history of Employment law, Lord Denning famously said that a breach (i.e. a constructive dismissal claim) had to go to “the root of the contract” if it were to succeed. The cynics might say this provided permission lop off all the branches! While Tribunals would be unlikely to sanction the latter, my experience is that they show considerable latitude, so long as the changes are reasonable. Reduced hours and/or reduced pay, for short periods, will usually come under the heading of reasonableness if there are compelling reasons for them. If the Government does provide support to the business then that may make those reasons less compelling, of course.

There are several matters to consider:

Consulting a workforce is not the same as negotiation; there does not need to be total agreement on the solution. It is wise to state the problem and seek to draw out a solution in conjunction with the other party. If you are genuine then there is a good chance you will be able to achieve acceptance of the changes you need to make even if you cannot get overt agreement.

If you recognise a Trade Union, there are more explicit requirements around the consultation. Please talk to us.

Take time
While time may not be on your side, precipitate, forced, changes to contracts of employment are far more likely run out of your control and end up in the courts. Furthermore, the Government is promising support. While that is not likely to be effective immediately, taking time could work in your favour to some extent.

It is lawful, as implied above, to make reasonable variations to the contract of employment. If the response to cancelled events or forced closures is reasonable, consultation has taken place, and you avoid undue pressure, then a variation in a contract of employment is very unlikely to lead to an Employment Tribunal claim, let alone an award.

A good test is how many employees would agree with your decision. If most would agree then your change must be reasonable. If most disagree, take care and perhaps think again.

Protection of employment

Variations that protect employment are also unlikely to lead to constructive dismissal claims. There are, however, implications to lay-offs which this blog discusses: Can I lay off employees?

Malcolm Martin FCIPD

Author Human Resource Practice

Blogs are for general guidance and are not an authoritative statement of the law.