With costs soaring, everyone is looking for ways to reduce overheads, often by cutting down on the cost of staff.
While making savings in this area doesn’t necessarily have to mean making redundancies, the rules can be complex and Tony Russell, who handles employment cases within the newly formed Leisure Industry team at Fraser Brown Solicitors, says that licensees need to be aware of the relevant legislation when restructuring their teams.
“In a bid to avoid redundancy, licensees may often look to alternatives such as changing contractual terms. Sometimes regarded as being a gentler way of reducing costs without imposing redundancy on staff, this isn’t necessarily the easier option. Changes in the contract (such as pay or hours worked), that are imposed unilaterally by the employer will be a breach of contract and may lead to a claim for unfair dismissal.
“Similarly, lay off or short time working may not provide an easy option for employers either. Short time working occurs when employees are not required to work for a number of contractual days each week, or for a particular number of hours during a working day. When employees are not provided with work by their employer, and the situation is expected to be temporary, they are regarded as laid off.
“In either case, unless there is a contractual term allowing the employer to take such action, an employee could bring a claim for unfair dismissal or unlawful deduction from wages. Certain minimum payments (“guarantee payments”) may be payable but employers should be aware that the employee can also ask to be made redundant in this situation. If changes are proposed and can be proved to be necessary, a proper consultation process will minimise or perhaps avoid such a risk.
“A consultation process should include all relevant employees and meetings (normally at least two) must be held to give employees the opportunity to put forward any alternative proposals. If there is a need for redundancy then in the current economic climate it is likely that employees would find it difficult to challenge this, but licensees should always consider whether there are any volunteers for redundancy. They also have an obligation to consider alternative employment (for example a transfer to different premises) to avoid a redundancy situation.
“Where only some employees are to be made redundant, a consultation process must be followed and if they are dismissed for redundancy, employees have a right of appeal.”
“The issues are more complex than they may first appear and getting it wrong will make matters worse. Licensees should seek early legal advice before taking the steps needed to survive in this tough climate.”
For further information visit www.fraserbrown.com or call 0115 988 8777.
Fraser Brown is a dynamic law practice working at premises in Nottinghamshire through its branches in Nottingham, Radcliffe on Trent and Bingham.
Its philosophy is to deliver superior legal advice through a personal and highly professional service for both commercial and private clients. Since 1990, Fraser Brown has acquired eight established and respected local firms as part of its major growth strategy for doing business in the 21st Century.
Fraser Brown is one of the region's longest established firms of solicitors. Over the last 12 months, it has experienced significant growth in areas such as property, contract work, construction and general litigation.