If you no longer require your staff to work for as many hours as they do due to a legitimate business reason, such as an operational or other changes in your business, or because demand has reduced; you may be looking to reduce the number of hours your staff work. But how do you do this lawfully? We set out the key considerations below to help you make the changes required whilst protecting your business at the same time.
What are the main things to look at when changing your employee’s contractual working hours?
- The starting point is that in common law, it would be a breach of contract to change an employee’s terms without any prior notice and without their agreement. If you can secure agreement to the changes you wish to make from your employee, in writing, this is the easiest and best way to make any changes to your employee’s working hours.
- However, you may wish to check whether your employee’s contract of employment does allow for you to make some changes to their working hours and the extent of this. For example, there may be a short time working or lay off clause in your employee’s contract of employment, or a flexibility clause. However, caution should be exercised in relying on such clauses and professional advice sought on their enforceability before you apply them.
- Our article about changing terms of employment can offer more in-depth information about this. However, ensuring that you have good policies and well-drafted contracts which are carefully followed make for a good starting point.
How can you best ensure a positive outcome from a discussion about reducing working hours?
Along with well-drafted contracts which can give you more flexibility with your employee’s contractual terms, clear communication and meaningful and timely consultation with staff will make the process more likely to be a success. It will also be beneficial if you can clearly justify and explain the changes you are making. For example, if you can explain to staff that you are looking to reduce hours in order to make cost savings and this is the alternative to making redundancies, staff may be more willing to accept this as they understand it is not a situation which has been taken lightly and is a proposal which is being made to save jobs. Taking time and care to consider the options available and to discuss any changes with staff as long in advance as possible means it will give them time to consider these changes and get used to them before they are implemented.
If you consult effectively with your staff, it may be that they have alternative suggestions which can be explored and that may help to keep morale in your team high, which can be a positive for your business’ productivity and retention of employees you wish to keep.
Common pitfalls to avoid
It is crucial that you do not make any assumptions about your employees’ situations. Consultation and an open dialogue can help with this, but it is important that decisions about hours or working patterns are not made on a discriminatory basis. For example, just because an employee is disabled it does not mean they need to work fewer hours than another employee, it would be for the employee, and their medical practitioners including perhaps occupational health, to advise you of this, not for you to unilaterally decide and reduce that employee’s hours but not a non-disabled colleague performing the same role.
Similarly, ensure that you are not treating a part time worker unfairly purely because they work part time. Part time workers should be afforded the same rights of consultation, notice and not to have their hours reduced without a legitimate business reason, in the same way as a full-time employee is. Any failure by your business to place these employees on an equal footing when altering their terms of employment, will be unlawful.
If the new working hours are agreed, it is important to notify the employee of this in writing within a month of the change being implemented, even if the employee does not sign their agreement to it.
What if an employee will not agree to a reduction in hours?
Ideally, all the above will lead to an agreement between your business and the employee, which you can then put in writing and the employee’s contract can be amended and re-signed by both parties. If you’re unable to reach an agreement, you may consider forcing a reduction in working hours either by dismissing and re-engaging the same member of staff under a new contract or imposing the changes unilaterally. There are risks attached to these approaches though, as staff may refuse to work, resign, work under protest and might even bring claims for constructive or unfair dismissal for example. If you are unable to reach an agreement about a reduction in working hours, it would be wise to seek advice from one of our specialist employment lawyers before taking any steps to force the change your business wants to make.