Wilko strikes: Pitfalls to avoid when changing contract terms
Chris Cook, September 18, 2019
Thousands of workers at high-street chain Wilko have voted to walk out following a unilateral change to their working hours
More than 1,600 workers at the chain’s two distribution centres are planning to go on strike following Wilko’s decision to force staff to work weekends. Workers were previously required to work one in three weekends, but under the new rota they will have to work nearly every weekend.
GMB union stated that: “Wilko prides itself on being a family-run company – but it is imposing contracts that will force staff to work on weekends, splitting up family time, without agreement of its employees… It’s clear how angry workers are about this brutal new rota system.”
Wilko has defended its actions by stating the new requirements are “within existing contracts” and that the action is in response to customer expectations of being able to shop seven days a week.
Changing terms and conditions of employment is a complex area. When an employer proposes to implement a change to working patterns or conditions these are often difficult to impose. As an employer it is important to consider alternative solutions, otherwise you could end up in a situation where your workforce strikes, or even worse where you are at risk of claims of unfair dismissal, wrongful dismissal or discrimination.
The first steps would be to consider what variation is necessary, which employees may welcome this change, and those who are likely to protest. You should consult with all staff and attempt to tailor your rota to work around their personal circumstances where possible. By doing this you will have fewer disgruntled employees, which will consequently reduce absenteeism. It is best to vary employment contracts in writing to reflect these changes to avoid dispute over what terms have been agreed.
If you are unable to cover the additional hours using your current workforce, hiring more staff to work unsociable hours could be the best solution. If there are greater demands for Wilko to be open seven days a week it should be seeking to recruit people to cover these additional hours. This will assist in improving work and home lives for many. There is likely to be a premium attached to this, but it might be a price worth paying to avoid a situation where existing staff are unhappy enough to go on strike.
Variation by agreement
If you are unable to cover additional hours using the methods above you can seek to vary contracts by agreement. You should consider the effect of the change on employees and give consideration to employees’ work/life balance by giving them consecutive rest days and time with their families where possible.
Employers should carry out a full consultation and use this process to explain the reasons for the proposed changes, respond to employee concerns, and explain the alternatives (which could include the risk of redundancies or dismissals should this proposal not be accepted).
GMB stated that it has tried to negotiate with management, however Wilko “does not want to know”. Workers therefore feel backed into a corner and consider strike action the only option left. It is therefore important to ensure you reasonably consider any proposals put forward by your employees or their representatives, and try to reach an agreement that suits all parties.
Offering incentives, such as a one-off bonus or other benefits, may also encourage employees to agree to the change and can be useful during negotiations.
If staff are agreeable to varying the terms of their contract, ensure these changes are put into writing and signed by the parties within one month of the change, to avoid any ambiguity and reduce the risk of a dispute occurring later.
Variation permitted within the contract
Employment contracts may give you flexibility to unilaterally vary terms and conditions, however this should only be used as a last resort. All contracts should be drafted to give you an element of flexibility to implement minor changes.
Minor unilateral changes to duties, hours or place of work could be considered reasonable depending on the extent of the change proposed. However, significant changes (such as requiring an employee to work every weekend or evening) are more excessive and could amount to a breach of contract.
An implied duty of mutual trust and confidence exists in all employment contracts, and any attempt to unreasonably vary fundamental terms without consent and/or notice will result in an employer being in fundamental breach of contract. This entitles employees to resign and pursue a claim for constructive unfair dismissal (subject to qualifying service) and/or wrongful dismissal.
If employees initially object to the change but continue to work under the new terms for a period of time, it may be deemed that they impliedly agreed to the changes and therefore there will be no breach of contract. However, if an employee makes it clear that they are working under protest an employer may still be liable for a breach of contract in any subsequent litigation. This is a very risky option and should be avoided if possible.
Dismissal and re-engagement on new terms
Terminating contracts and then re-engaging employees on new terms is a risky and extreme course of action and should only be used as a last resort. Unfortunately, on occasions, this may be the most appropriate method to implement change.
Employers will need to show there is a fair reason for the dismissal and that they acted reasonably when dismissing the employee. This means an employer will need to show a good business case and follow a proper consultation process before taking this step.
Employers will also need to ensure that they terminate the contract lawfully to avoid a breach of contract or wrongful dismissal claim being brought against them. However, they will still be at risk of unfair dismissal claims being brought by former employees and even employees who have reluctantly taken up the new offer.
To ensure your business does not fall foul of your employees or the law, seek specialist advice prior to taking any action so you are aware of all the implications before proceeding.
Chris Cook is a partner and head of employment and data protection at SA Law