There are plenty of opportunities for reshaping the workforce, but the threat of legal action is never far away. James Harris reports 

There are plenty of opportunities for reshaping the workforce, but the threat of legal action is never far away. James Harris reports

The fateful call to the boardroom is a common feature of any recession for many employees, but mercifully, that may be slowly changing. Guy Hollebon, head of employment at London and Bristol-based law firm Bevans Solicitors, says: ‘A year ago, businesses were making redundancies out of necessity. Now, businesses are looking strategically at the opportunities in the current environment.’

Although redundancies may have slowed, many employers are still looking to shave costs in the workforce, but there are other options.

Says Hollebon: ‘Employers can change the terms and conditions of employment to save costs, for example altering remuneration structures or moving employees to different roles if the work level drops.’

While this may seem a useful measure to overcome a difficult trading environment, there is a significant caveat – without a contractual right to make such changes, employers may leave themselves open to legal liability.

‘If employers don’t have an express right to make changes in the employment contract, it may be very difficult to implement changes without being in breach of contract. A lot of employers don’t reserve that right in their contracts,’ says Hollebon.

Michelle Kemp, associate at Bournemouth-based law firm Lester Aldridge, points out: ‘You can’t unilaterally change a contract.’ This means that any employers considering this option have little choice but to get employees on board.

Communication is key

Understandably, this can be a difficult process, but Hollebon recommends maintaining a frank dialogue with staff members: ‘We had a client that was in a difficult situation, so it held a large-scale consultation with its staff. They offered to drop the salaries for three months, or risk losing jobs by going into administration. The business proposed to reimburse its staff after the three months as well as provide a loyalty bonus. The staff were fully aware of the situation and most of them agreed to the new terms.’

However if an agreement is not reached, then dismissals may be the only option left. ‘It is possible to dismiss, while offering to re-hire on the new terms,’ says Kemp, who warns that this course of action may lead to costly unfair dismissal claims, if it is not based on a ‘good business reason.’

In the aftermath of a major restructuring round, it is important to look to the future. Says Hollebon: ‘When bringing in new talent, you have to come up with a workable new contract. You don’t want people disappearing to competitors.’

Similarly, it is important to keep communication lines open. ‘Don’t alienate your staff. After a round of redundancies, people will feel out of sorts, so it’s important to re-engage them,’ says Kemp.

While many employers will still be keen to save costs, those in the enviable position of re-opening recruitment programmes can look forward to no shortage of keen applicants. Hollebon says: ‘There are talented people looking for jobs. There has never been a better time to upskill your workforce.’