smallbusiness.co.uk: Helping your business think big

Changing terms and conditions can sometimes be very easy as, for example, people do not normally object to a pay rise (even if it isn’t enough), but reducing them in any way is often a problem. However, your question doesn't state whether the changes are favourable or not.

You should start by consulting with your staff and explain what you want to do and why, including when it is going to happen, and hopefully they will agree. If they do not agree however, you may have a problem. An employer can change terms against the wishes of the workforce but it is fraught with danger. Putting it briefly, an employer must have a “good commercial reason” and must go about it “reasonably” – both expressions which create work for lawyers and Employment Tribunals alike.

Further, if 20 or more employees are affected, you lay yourself open to awards for failing to consult, as with those in redundancy and transfer situations. You would need to consider any points raised by your employees as to why it should not be done at all, through to suggestions as to how the damage can be limited by introduction over a period of time - e.g. red circling.

Better not to not change their terms, but to dismiss them by giving each his/her own statutory or contractual notice, whichever is the longer, and offer them a new job which is substantially the same as the old one but incorporating the new terms. Make it clear that continuity of employment applies and do not give notice less than his/her entitlement. Anyone who rejects the offer would have to (and almost certainly would) claim unfair dismissal. Your ‘potentially fair’ reason for dismissal would be ‘some other substantial reason’. If your proposed changes are substantially less favourable it would be prudent to take professional advice every step of the way.