WALKING THE TIGHTROPE OF CHANGING TERMS AND CONDITIONS OF EMPLOYMENT

No-one likes change, least of all employees!

With ever-evolving and changing business-related market conditions such as technological innovations, hyperinflation, increased interest rates and recessions, and ongoing unexpected occurrences like COVID-19, load shedding, and the war in Ukraine, companies are constantly required to ensure their continued existence and profitability by improving efficiencies and implementing cost-savings. Due to these factors, companies are often required to change the terms and conditions of employment of their employees, for example, working arrangements such as hours of work or shift patterns.  

Employers may mistakenly believe that they, as an employer, have the right to simply change terms and conditions of employment unilaterally. 

Unilateral changes to terms and conditions of employment, that is, without the consent of an employee, are considered an unfair labour practice with potentially serious consequences if challenged by employees or their trade union. 

Employers may fairly change terms and conditions of employment, but the following criteria must be met before doing so. 

1. Impact on employees – Before embarking on the process of changing terms and conditions of employment, employers must consider the impact of the change on employees, for example, their remuneration, benefits, and working hours.

2. Fair reasons – Any change to terms and conditions of employment must be for valid reasons, such as the employer’s operational requirements or valid changes to the job content/duties. The reason/s for the proposed change must be conveyed to employees and their representatives (trade union) for their consideration

3. Consultation with employees – Employers are required to consult with employees or their representatives before making any changes to the terms and conditions of employment.

4. Notice of change – Employers must provide employees with reasonable notice of the proposed change to allow them the opportunity to raise objections or make any representations. The employer is required to consider any objections and representations, and if the employer rejects them, the reasons must be provided. This is a necessary step to ensure procedural fairness, which goes a long way to obtain the employee’s agreement to the change/s and can promote sound labour relations.

If employees do not accept the proposed changes to the terms and conditions of employment, an employer may retrench the employees. In this stuation, the employer would be entitled to employ new employees who are willing to work on the proposed new terms and conditions of employment. However, in order for the retrenchments to be fair, it is essential for the employer to be able to show that it has valid operational reasons for the proposed changes to the terms and conditions of employment.

Changing terms and conditions of employment and the retrenchment process that may follow is often complicated and risky, and employers should seek expert legal advice if in doubt.