Reducing staff hours: an alternative to redundancies?

James Potts - Associate Director of Legal

August 28 2020

Taking a hard-working employee aside to tell them that their job’s at risk might be the toughest task you face as an employer.

But there are ways you can avoid it.

Revamping staff roles. Withdrawing job offers. Changing terms & conditions. We’ve explored these steps and more in an earlier article on how to cut staff costs without making redundancies.

But today, I’m going to focus on how reducing staff hours can help you trim your expenses and retain your workforce, ready for when business picks up again.

Let’s get started.

What are reduced hours?

Reducing staff hours means asking your employee/s to work fewer hours so you can pay them fewer wages and save money for your business.

It sounds simple. But there’s a lot you need to do before you can make any changes.

First, you need to have a good business reason for cutting people’s hours. Examples could be:

  • Reduced demand for the business’s product or service
  • A change in work duties
  • Earlier/later working hours
  • A local lockdown due to COVID-19

Then, you need to work out whether your employees’ contracts allow you to reduce the hours that they work.

If they do, you should still follow a careful process and consult your staff before you cut their hours.

But if they don’t, you’ll need to revise the contracts and ask your workforce to agree to the changes…

How do I change an employment contract?

As a general rule, you can only make changes to someone’s contract if:

  • Your employee agrees to the change
  • A representative of the employee agrees to the change on their behalf

It’s best to hold a consultation with your employee if you need them to agree.

This can just be an informal, one-on-one meeting, where you explain your reasons for the change and consider the employee’s ideas and concerns.

Some contract changes can be agreed verbally by the employee or their representatives. But even after a verbal agreement, you should confirm the change in writing.

Changes to terms within a written statement of main terms must be confirmed in writing within a month of the change, and you should consider whether you need to re-issue a new statement of main terms under the Good Work Plan rules.

This way, you’ll also have proof of the agreement to prevent any mix-ups and help protect you if you face a dispute.

But what happens if your employee won’t agree?

Can I force the changes upon my staff?

If the alternative is redundancy, your employees will likely settle for fewer hours.

But if not, you might still be able to force through the changes. This involves dismissing and then rehiring a worker under a new contract containing the reduced hours.

Forcing changes should be a last resort, and you need to consider:

  • Whether you’ve already tried everything to reach an agreement with the employee
  • If the changes are crucial for your business
  • The potential harm to staff morale and productivity
  • The risks of legal action

Workers who face forced changes might be able to claim unfair dismissal at an employment tribunal.

So if you’re thinking about dismissing and rehiring your staff, it’s worth getting expert legal advice to make sure it’s the right choice.

You might find that reducing the size of your workforce is a better option…

What if I still need to let staff go?

You should only look at job losses once you’ve explored all the alternatives. And like forcing contract changes, the road to redundancies is tough and riddled with risks.

But there is an easier way…

Rightsize from Peninsula gives you access to a personal HR consultant who manages every step of your redundancy process.

They write you a watertight business case. They remove any costly legal risks. And they even handle those tough employee chats, so you don’t have to.

Click here to learn more, or book your free consultation now on 0800 028 2420

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