Negotiating Changes in Employee Terms and Conditions of Employment
Community organisations are experiencing serious cuts to their funding It is vital that employers stay within the law when implementing cutbacks within their organisations. This article gives guidance on now to negotiate change with employees and how to deal with redundancy if this becomes necessary
A crisis acts as an accelerator of change and legislation needs to be interpreted in the light of changing circumstances. The concept of what is reasonable when employers seek changes in employee contracts of employment is altered. Employers would be well advised to consider the following when implementing changes to employee terms and conditions of employment.
- Employers must be aware that while it may appear reasonable to simply stand up and announce a pay cut for staff, for example, such a move is not lawful.
- It is important to stay within the law so that employers do not end up trampling on employees' rights. A particular problem currently for community sector employers trying to act fairly and legally is that they may receive instructions from government funding departments as to what changes they have to implement. This may cover issues of terms and conditions. Employers should be aware that it is they who will be legally liable if they act unlawfully towards their employees - even if this is at the behest of a government department.
- In dealing with the crisis, community organisations will be keen to prevent job losses and will wish to explore all alternatives to redundancy. Permanent job losses should be a last resort. Among the alternatives are (temporary) lay-offs and putting people on short-time. This should be provided for in the contract of employment.
- The relationship between employer and employee must be based on mutual trust. Employers should engage in open and transparent consultation when seeking to reduce employees' salaries and benefits. They should give serious consideration to employee suggestions as to how changes to terms and conditions could be implemented. The aim should be to reach agreement with employees. If agreement is not reached, however, then an employer can implement changes arbitrarily. However, it is still open to interpretation as to whether the employer has acted reasonably or not.
- The Terms of the Employment Information Act, 1994-2001, requires employers to give written notice of changes to their contracts of employment.
- Arbitrary changes in work conditions and/or salary can be such as to constitute a fundamental breach of contract sufficient to justify an action for constructive dismissal.
- While an employee could consider resisting a pay cut or other changes to the contract of employment, it would not be advisable for them to do so at this time. An employee, in such circumstances, could take payments of wages claim to a Rights Commissioner instead of resigning and claiming for constructive dismissal.
- Extreme stances will not be viewed in a favourable light and both employers and employees must be seen to engage constructively and demonstrate flexibility.
- Some good advice to management would be to stay calm, take advice, understand the partnership model and work as a partnership by seeking consensus and agreement through negotiation.