There are several aspects that may result in a need for reorganization and changes in a contract from the perspectives of both the employer and the employee. For instance, a company may expand and need some people to work in the new locations, or a worker may want to extend the initial contract. It is vital to mention that some contracts have flexibility clauses, which are the terms that provide companies with an opportunity to adjust some conditions of the contract and make reasonable changes. They are a significant feature of a lawful contractual change and are always mentioned in a contract. Flexibility causes serve the purpose of allowing an employer to make changes when they are necessary without an employee’s agreement. Thus, not all changes in the contract require a worker’s consent; however, they should be notified about the change timely.
There are alternative ways for an organization to change contracts if flexibility causes are absent. One of them is dismissal and re-engagement, which means that the company dismisses an employee and hires them under a new contract. The first step of such an approach for the company is ensuring that it has done everything to reach an agreement on the new terms and that it is impossible to obtain an agreement to changes. Then, the employer should follow a fair dismissal procedure and provide an employee with a statutory notice. The worker should also be offered a right to appeal against their dismissal. Finally, the employer hires the employee again under a new contract. It is crucial to note that changes in the contract do not take place until the worker is rehired under the new terms.
In the case of dismissal and re-engagement, companies should consider the risks associated with this strategy. First, it is crucial to discuss all of the aspects of the new contact with the employee, as, in case they feel that the dismissal was unfair, they can make a claim to the employment tribunal. Second, the company may face legal action for dismissing and rehiring 20 or more employees unless a collective consultation is held. Moreover, dismissal and re-engagement may result in the decreased loyalty among the employees, as the change was forced onto them, and they may not be pleased with it.
Another way in which an organization can change contracts is by imposing the change without consent. An employer can make a unilateral change to the contract without consulting an employee. However, this approach is associated with severe risks, as workers may refuse to operate under new terms, may resign or claim constructive dismissal, and take the case to the employment tribunal. Notably, employees should state their disagreement with the new contract clearly, as, otherwise, the failure to take action will be considered an agreement to the changes.