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10th October 2023

Is it legal to reduce employee hours? [and should you do it?]

Many businesses have to face the choice of whether they reduce employee hours or not, but is it legal for them to do so?

This blog will explore everything you need to know about whether employers can reduce staff’s working hours.


Can employers reduce employee hours?

There are a two main things you need to look out for if you’re wanting to change your employees hours:

  1. Common law - It’s a breach of contract if you change an employee's hours without notice and them agreeing. The easiest way to make amendments to working hours is to gain a written agreement from your employee.

  2. Check that the employees contract allows changes to working hours to be made - The contract may contain a short time working or lay off clause, but this isn’t something you want to rely on. If you’re considering exercising these clauses you may want to seek professional advice on whether you should enforce them.

It’s legal for employers to reduce employee hours, as long as you can justify it. It’s important that you keep your employees informed of the changes well in advance and employment law requires you to provide legitimate reasoning for these amends.

If the employee agrees to the reduction in hours, you will need to update their contract and provide them with written notice.

Ultimately it’s legal for you to change an employee's working hours, as long as you inform staff and have the right reasoning. 


Reasons you may want to change an employee's hours

Typically employee hours tend to change in times of uncertainty and downturn, but here are some other common reasons for reducing hours as well:

●       Pay rises or decreases

●       Changed duties

●       A change to business situations

●       A decline in demand for products or services

●       Serious matters like Covid-19

In terms of employment law, there are three main instances where you can change a staff members contract, such as:

●       A flexibility clause

●       When the employee agrees to it

●       A representative of the employee agrees to the changes on their behalf

However, if the employee doesn’t agree you may want to consider a forced reduction in hours. This involves dismissing and re-hiring the employee under a new contract, but this should really be a last-resort approach. 

You need to note that this doesn’t address any performance issues and staff members may challenge this due to unfairness. 

If you choose to impose this unilaterally you may run the risk of staff refusing to work, resigning or working under protest.


How you can reduce your employee hours

If you reduce hours incorrectly, you may put yourself in a place where staff can make claims about a breach of contract or discrimination. 

For example, if you decide to reduce an employee's hours due to poor performance, you’ll need to provide evidence to back this up.

To  ensure you get a positive outcome, your first approach should be an open and honest discussion with the staff member where you explain:

●       The reason for the reduction in hours

●       How you came to the decision

●       The new hours and any changes in salary

You’ll also need to write to the employee within a month explaining the changes and how they’ll affect them.

Clearly communicating in a timely manner and providing reasoning for your decision such as, explaining that working hours are being reduced to cut costs instead of you having to make redundancies. This should promote a positive conversation, as staff should understand that this is a necessary step to help the business thrive without needing to let go of people. 

Having the conversation well in advance of the proposed changes also gives the employee the chance to think about whether they want to agree to the new terms.


How to reduce part-time workers hours

If you’re considering reducing a part-time worker’s hours you need to treat them in the same way as you would for a full-time worker.

This essentially works in the same way as full-time employees, meaning you need to provide reasoning and evidence for your changes along with written notice.


Common pitfalls you want to avoid

It’s important that you don’t make any assumptions about an employee's situation. For example, you can’t reduce an employee with a disability working hours because you think they won’t need to work as much as someone without a disability.

You also want to avoid treating a part time worker unfairly or differently to full-time workers. Treating them differently and changing their hours without consultation with the employee is unlawful, meaning you should follow the same process as you would with any other staff member. 

Lastly, remember that you need to notify staff of the change in working hours in writing


Can an employee reduce their own hours?

Staff members can request a reduction in hours if they have at least 26 weeks of continuous service. As the employer you must respond to this request within 28 days.

Employees tend to ask for a reduction in hours to get a better work life balance or so that they can meet other obligations outside of work. If you decide to decline the request you’ll need to provide a valid reason, such as:

●       It has a negative impact on product quality.

●       It would have a negative effect on meeting customer demand. 

If you’re looking for support with arranging and keeping on top of employee working hours, our payroll, HR and time and attendance solutions can help you do just that.

Our software stays up to date with all the latest rules and regulations, helping you stay compliant, and can integrate your payroll, HR and time and attendance so that everything is in one place. This makes it easy for you to spot any trends in attendance and track exactly what hours each employee is contracted to work.

To learn more about how we can help you arrange and keep on top of your employee’s working hours, get in touch with Payescape today.

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