Photo by Liviu Florescu on Unsplash
Take it or leave what?
This is the stark choice faced by thousands of Asda employees (US parent company Walmart) in the UK who have been told by their employer that they must accept new contracts of employment.
The GMB Trade Union representing many of the affected employees has publicly stated its opposition to the new contracts. The Union’s argument amounts to the claim that the new terms and conditions will leave employees in a worse position.
Asda has stated that if employees don’t agree to the new contracts of employment by 2 November 2019, they will no longer have a job with the company. Effectively, the employees will be terminating their employment with the company Asda is arguing.
What’s the legal position?
Well, Asda is stating that it wishes to terminate the existing contractual agreement with the affected employees and replace it with a new contract. In this type of situation, Section 86 of the Employment Rights Act 1996 is particularly relevant.
The Act lays down statutory minimum periods of notice that the employer must give to the employees in question. These statutory minimum periods of notice apply to all those employees who have been continuously employed for four weeks or more.
Given the amount of previous Blogs of mine where I have covered the issue of an individual’s employment status, I really shouldn’t have to remind readers that the statutory notice periods apply to employees only i.e. those individuals who work under a contract of service (as per Section 230 of the Employment Rights Act 1996).
The statutory periods are detailed below:
- One week’s notice is required to be given to those individuals who have been employed for more than four weeks but under two years
- If the employee has between two and 12 years’ continuous service, s/he is entitled to a week’s notice for every year of service
- If an employee has more than 12 years’ continuous employment, the maximum notice period is 12 weeks
It is important to note that these are statutory minimum periods of notice and that contracts of employment may actually lay down a requirement for longer periods of notice.
Alternatively, some employers may choose to insert a term in the contract where they can pay off the employee immediately by giving them their full entitlement to notice pay. There is no need for the employee to work whatever notice period they are entitled to receive. This type of contractual term is known as payment in lieu of notice.
Back to Asda: the affected employees are being given their statutory notice period whether that’s 1 week, 2 weeks or up to the maximum notice period of 12 weeks (depending on the individual’s length of service) as per Section 86 of the Employment Rights Act 1996.
What if some people still refuse to sign the new contracts after their statutory period of notice has expired?
There is always the possibility that certain employees (with the requisite length of service or meeting other relevant criteria e.g. protected characteristic discrimination) may be able to raise a claim for unfair dismissal in terms of the Employment Rights Act 1996.
Asda, on the other hand, may be able to justify the dismissals as potentially fair under Section 98(2) of the Employment Rights Act 1996 i.e. for some other substantial reason (the necessity for a wide-scale reorganisation in a tough retail environment).
No doubt lawyers for both Asda and the GMB are already staking out their respective legal positions for a possible battle before the Employment Tribunal.
A link to the story on the Sky News website can be found below:
Asda refuses to remove sack threat for thousands of staff over compulsory contracts http://news.sky.com/story/asda-refuses-to-remove-sack-threat-for-thousands-of-staff-over-compulsory-contracts-11845215
It has since been reported in the Daily Mirror newspaper that one of Asda’s longer serving employees who was sacked for refusing to accept the new contract is intending to lodge an Employment Tribunal claim.
Please see the link below to this story:
The Guardian also reported that the negative publicity from this story could be costly for Asda – see the link below:
Copyright Seán J Crossan, 26 October and 12 November 2019