Inflexible Contracts of Employment: Address them now

If you are operating contracts of employment where you’ve been a little too restrictive, and feel you may need flexibility in the future, now is the time to act.

If you don’t have a flexibility clause to move the team, if you don’t have the flexibility to change their pattern of work. You could fall foul of the proposals coming in the Employment Rights Bill.

​The UK government’s proposed Employment Rights Bill aims to significantly restrict the practice of “fire and rehire,” where employers dismiss employees and re-engage them on different, often less favourable, terms.

Under the Bill, such practices would be prohibited except in extreme circumstances, such as when a company faces imminent insolvency.

This legislative shift is part of a broader effort to enhance worker protections and is expected to come into effect in 2026 following further consultations.

Given these impending changes, employers considering modifications to employment terms to introduce greater flexibility should act promptly.

Implementing such changes now, while current laws permit more leeway, can help organizations adapt to future constraints.​

The case of Bateman and Others v Asda Stores Ltd [2010] UKEAT/0221/09 serves as a pertinent example.

In this case, Asda sought to implement a new pay structure and relied on a clause in its employee handbook that reserved the right to amend its contents to reflect changing business needs. The Employment Appeal Tribunal upheld Asda’s actions, noting that the handbook’s wording allowed for unilateral changes, including those related to contractual matters such as pay and hours of work.

However, it’s crucial to approach such changes with caution.

While the tribunal supported Asda’s position, it was noted that employers should not use such clauses to reduce pay or make other detrimental changes without proper consultation. Failure to engage with employees can breach the mutual term of trust and confidence inherent in employment relationships.

What can an employer do now?

Get varying now- if you feel you have restrictive contracts and want to make them more flexible, now is the time to consult and get your employees agreement before this part of the Bill is enacted. Here’s some other things you can be doing:

• Ensure that employment contracts and handbooks contain clear, well-drafted variation clauses that allow for necessary changes.​
• Understand Consultation – if you think you know what this involves by are not 100%, get help now before the change.
• Consider Consultation as vital- Even with such clauses, always engage in meaningful consultation with employees before implementing changes to terms and conditions.​

By proactively addressing these considerations, employers can better position themselves to navigate the evolving legal landscape and maintain harmonious employee relations.

If you need assistance with outsourcing HR administration to someone who can be trusted to handle your variation confidentially and securely, then call us on 01527 306095.