Can My Employer Reduce My Pay Or Hours Because Of Coronavirus?
We have noticed an increase in clients asking us this question over the past few months For more information, read on.
The starting point in answering this question is the contract of employment. Some contracts allow for an employer to vary the terms and conditions of their staff. Such terms and conditions would include varying hours and pay. Even though the employer has the right under the contract to vary terms and conditions, they must be reasonable in the way they exercise that right.
Other employers have no such provision in their contract or, alternatively, have not issued terms of employment to their employees (possibly in breach of their obligations, but that is an issue for a different blog). In such circumstances, the employer and employee would need to agree the change to their normal terms and conditions of employment.
How do I know if my employer is being reasonable?
As above, if you do have a contract with your employer which allows them to change your terms and conditions of employment, that right must still be exercised reasonably.
If your contract does not allow for the change of terms and conditions, the employer’s actions and whether they are being reasonable would still be a consideration in the event you refused the change (see below).
In considering whether an employer has been reasonable the Employment Tribunal would consider:-
- Was there a legitimate business reason for the change e.g hours or pay reduction? In the current circumstances, for many businesses, it will be easy to establish there is a legitimate business reason for the proposed change, especially if the proposal is a temporary change for a defined period or an attempt to avoid redundancies.
- Have the disadvantages to the employee been properly considered and weighed against the objectives of the employer in implementing the changes? All the circumstances would be taken into account eg: have all employees been asked to take a pay reduction (and if not why), is the reduction permanent or temporary, is it a reduction or deferment (is there a commitment to pay the reduced amount at a later date) etc.
- In all the circumstances, has there been meaningful consultation about the pay reduction? This might include personal or union consultation. However, there must be a real dialogue and consultation about the proposals.
- Have the majority of employees accepted the change? If this is a change affecting all staff, then, in the circumstances, the employer might decide not to delay progress because of a few objections.
- Has the employer acted reasonably in considering employee objections? Again, much depends on the particular circumstances, and the reason for the objections. That said, by way of example, in the current situation, an employee might object to a permanent reduction in hours but be prepared to accept a temporary reduction for a defined period. An employer rejecting such a proposal could be considered as unreasonable.
What happens if I refuse and/or object to the changes to my terms and conditions of employment?
Apologies for being blunt, but your employer could terminate your employment. This could be by reason of redundancy (if the changes proposed were part of a wider effort to avoid redundancies). Alternatively, they could suggest they are unable to continue to employ you without the changes to your terms and conditions of employment (“some other substantial reason”).
If you have more than two years’ service with your employer, the termination of your employment (including redundancy) could give rise to a claim of unfair dismissal against your employer. In considering whether the termination of your employment was fair or unfair, the Employment Tribunal will consider whether your employer’s decision to end your employment for redundancy or otherwise was reasonable in all the circumstances.
If you believe your employment was motivated by some other reason, you may still be able to make a claim for unfair dismissal at the Employment Tribunal even if you do not have two years’ service. For example, if you think the real reason for your employment being terminated is because you have complained about health and safety or you have whistle-blown about some of your employer’s practices, you would not need two years’ service to claim.
Also, if you think there is some discriminatory element to the termination of your employment, you may have a discrimination claim at the Employment Tribunal. For example, if you couldn’t agree to the changes your employer wanted because of a disability or the disability of someone you care for, that might be the basis of a claim. Such claims do not require that you have two years’ service.
Lincs Law Employment Solicitors Can Help You
If your employer wants to make changes to your terms and condition of employment, call us for a free telephone consultation on 01522 440512. For more information about Lincs Law, Employment Solicitors and how we help our clients, please visit our website at https://lincslaw.co.uk/services/employees/
Sally Hubbard, Specialist Employment Solicitor
Lincs Law Employment Solicitors
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