Is it legal to reduce employee hours?

Times are tough right now, many businesses have to face the choice of whether they reduce employee hours or not, you may be facing the question, Is it legal to reduce employee hours? and should you do it? This blog will explore everything you need to know about whether employers can reduce staff’s working hours and the best ways to go about it.

Is it legal for an employer to reduce an employee's hours?

Yes, in most cases, employers have the right to reduce an employee's hours, as long as it complies with applicable terms of any employment contracts or collective bargaining agreements. There are a two main things you need to look out for if you’re wanting to change your employees hours:

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.

Check that the employee's contract allows changes to working hours to be made: 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. If you’re considering exercising these clauses you may want to seek professional advice on whether you should enforce them.

Reasons you may want to change an employee's hours

If you are an employee or employer looking for reasons why your working hours are likely to change and the legality behind it, then below are the common reasons for this.

Typically employee hours tend to change in times of uncertainty and downturn, see below other common reasons for reducing hours:

• Pay rises or decreases: Changes in compensation may necessitate adjustments to working hours to align with budgetary constraints or increased pay.

• Changed duties: If an employee's role evolves, their working hours might need modification to accommodate new responsibilities or tasks.

• A change to business situations: Shifts in the company's operational needs, such as restructuring or reorganisation, could prompt adjustments in employee hours.

• A decline in demand for products or services: Decreased demand may lead to reduced operating hours or the need for fewer staff during certain periods.

In terms of employment law, there are three main instances where you can change a staff member's contract:

• A flexibility clause: Employment contracts may include provisions allowing for adjustments to working hours under specified circumstances, providing a legal basis for such changes.

• When the employee agrees to it: Changes to employment terms can occur with the explicit consent of the employee, ensuring that any modifications are mutually agreed upon.

• A representative of the employee agrees to the changes on their behalf: In situations where the employee may not be able to directly consent, such as legal incapacity or representation by a union, changes to the contract can be negotiated and approved by a designated representative acting in the employee's best interest.

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 to reduce your employee hours

As mentioned above, there are rules and regulations to follow when reducing your employees 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 is key.

When reducing employees hours you need to explain 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 worker hours?

If you’re already working with employees that have reduced hours already, you may be wondering how you go about reducing this further. Both full time and part time employees need to be treated the same. 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.

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.

Common mistakes 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.

Reducing Employee Hours FAQs:

Can employees negotiate alternative arrangements if their hours are reduced?

Depending on the employer's policies and the specific circumstances, employees may have the opportunity to negotiate alternative arrangements such as flexible schedules, job sharing, or telecommuting to mitigate the impact of reduced hours.

Can employees refuse reduced hours?

In general, employees are expected to comply with reasonable changes to their work schedules, including reductions in hours, unless they have a valid legal or contractual basis for refusal. Refusing to work reduced hours without justification may result in disciplinary action, including termination.

Do employers need to provide notice before reducing hours?

The requirement for providing notice before reducing hours varies depending on the jurisdiction and the terms of employment agreements. In some cases, advance notice may be required by law or contract, while in others, it may be considered good practice but not legally mandated.

Can reduced hours affect employee benefits?

Yes, reducing an employee's hours may impact their eligibility for certain benefits such as health insurance, retirement plans, and paid time off. Employees should review their benefits package and discuss any changes with their employer or HR department.

Are there any legal protections for employees whose hours are reduced?

Employment laws in many jurisdictions prohibit discrimination or retaliation against employees for reasons such as race, gender, age, disability, or exercising their legal rights. Employees who believe their hours were reduced unlawfully should seek advice from an employment lawyer or HMRC.

Is there any financial assistance available for employees whose hours are reduced?

Depending on the specific circumstances, employees whose hours are reduced may be eligible for working tax credits or other forms of government assistance. They should inquire with their local unemployment office or relevant government agency for more information.

What should employees do if their hours are reduced unlawfully?

Employees who believe their hours were reduced unlawfully should document the situation, raise their concerns with their employer or HR department, and consider seeking legal advice or filing a complaint with the appropriate government agency.

How can employers communicate effectively with employees about reductions in hours?

Employers should communicate openly and transparently with employees about the reasons for the reduction in hours, any potential impacts on benefits or job security, and any available support or resources. Clear and timely communication can help alleviate concerns and maintain morale among employees.

Get advice from payroll experts online today

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.