How long must an employer consult with employees for when seeking agreement to change their contracts?

An employer should always consult individually with employees with a view to obtaining agreement to changes to their contract of employment, and the employer may also have an obligation to consult collectively depending on the number of employees the changes affect.

The length of the individual consultation period required will depend on several factors, including the number of employees involved, the nature of the proposed change and the employees’ responses to the changes. There is no minimum time frame for individual consultation. If the employees agree to the proposed changes, the consultation period may be relatively short. If the employees don’t agree with the changes, the consultation period may go on for many weeks or months.

In accordance with s.195 of the Trade Union and Labour Relations Act 1992, a collective redundancy consultation may also apply where the employer is proposing to change contractual terms where there would be a dismissal if the employee/s don’t agree to the changes proposed. This is because, for the purposes of the duty to consult collectively, the definition of “redundancy” covers dismissal for any reason not related to the individual, which includes the situation where an employer proposes to dismiss and offer re-engagement to employees who do not agree to a proposed change to their terms and conditions.

Collective consultation should take place as early as possible to give adequate warning of the proposed changes. In any event, it must begin at least 45 days before the first dismissal takes effect when the employer is proposing to dismiss 100 or more employees within a period of 90 days or less, and at least 30 days before the first dismissal takes effect where the proposed number of dismissals is between 20 and 99.

Normally, when an employer first seeks unilateral agreement to a change to the employment contract, it will not know how many employees will agree to the change. Therefore, to avoid delay, where there is a possibility that it will consider dismissing and re-engaging employees, it is therefore prudent for the employer to consult collectively from the outset, where the changes will affect 20 or more employees.