Changing Terms and Conditions: Dismissal and Re-engagementPosted: 27.10.2011

Is dismissal and re-engagement possible?

Earlier this year, Shropshire Council formally set in motion a dismissal and re-engagement process for all staff, in a bid to make £7m in terms and conditions savings. Under the proposals, all staff had their contracts terminated and were then offered immediate re-employment on the basis of the less favourable terms and conditions.

Changes to terms and conditions are generally considered a means of avoiding job losses and redundancies. However, an employer can be faced with serious opposition when attempting to implement such a process. There are three possible options if you decide to change terms and conditions:

a) Seek agreement to a variation in terms and conditions and dismiss those who refuse to agree;

b) Impose the change unilaterally, leaving it to individual employees to decide how they should respond;

c) Terminate existing contracts of employment and offer re-engagement on new terms and conditions.

If you think you need to review the terms and conditions of your staff, it is always essential that you seek out detailed professional advice.

Option c) can be used where there is widespread unwillingness to accept a contractual variation, in which the employer terminates the contracts of the existing employees, while offering re-engagement under new contracts of employment on the revised terms. The attraction of this option for an employer might be as a way to bring matters to a head and to cut short negotiations or disruption.

The major disadvantage to dismissal and re-engaging your workforce is that all of the employees in question would be dismissed, which could have catastrophic effects on essential services. Even those who chose to accept the new contract might at the same time bring unfair dismissal claims arising out of the termination of the old contract.

From 3rd October, all staff in Shropshire County Council affected by the dismissal and re-engagement changes were re-employed under the new terms and conditions. It is possible; just be very careful and make sure you call Real People for expert advice.