In this uncertain world, companies and employees are concerned about the future. Here Fergal Dowling, head of employment law at Irwin Mitchell, explains that while everyone may be working to survive, there may be legal implications.
Headlines abound about redundancies and firms closing but, interspersed among these are stories surrounding other approaches being taken to cope with the economic downturn.

This is particularly so in the automotive manufacturing sector where, since the autumn of 2008, a number of strategies have come to light.

These include:

· Extended Christmas and New Year shutdowns

· Employees/representatives voting to accept pay cuts

· Employees/representatives accepting shorter working weeks for the same or less pay

· Employers encouraging employees to take sabbaticals

· Closures of plants for several months

The approach of workers and employers coming together in a bid to retain jobs, vital skills and the business is in striking contrast to many of the images conjured up of the industrial relations' landscape of the 1970s. Employers are not absolved, however, from having to consider the legal responsibilities and ramifications of changing contracts of employment and associated terms and conditions.

Where employers and employees are in splendid accord on the introduction of flexible working practices, the transition should be relatively straightforward. It is where one side imposes its decision upon the other that there is the opportunity of disagreement which could lead to tribunal or court proceedings.'

There are several means of both parties arriving at changes to the contracts of employment, which should be recorded in writing. It may that employees are members of a union in which case negotiations could be conducted with representatives who would then submit proposals to the employees.

Some contracts allow an employer to change details without consultation or unilaterally, although such action might give rise to employees feeling aggrieved. The employees may then work under the new regime but establish that it is under protest, leaving them the option of suing for breach of contract in the High Court or County Court.

Should employees continue working, their conduct could be interpreted as an acceptance of the new terms. They could, of course, refuse to work in line with the new contractual terms or resign and claim constructive dismissal. The latter only applies if the employees can demonstrate that the changes are so fundamental that they can regard the contracts as having ended and been breached, which is the catalyst for their resignation.

Some employers may determine to dismiss their employees and offer them the opportunity of
re-employment under new terms. These employers risk ill feeling and the loss of skills needed for the business to continue trading should their former employees reject renewed employment.

Any such dismissal would need to be deemed fair and reasonable.

It is my hope that the spirit of co-operation and understanding demonstrated by a number of automotive companies spreads to other sectors and persists once the recovery begins and beyond.