DCP228 and Business Electricity
What is DCP228? DCP228 is a regulation to be introduced by Ofgem in April 2018 which will change the way busin...Read More
Next has drawn criticism for allegedly paying workers who joined before 2008 a premium (which newer recruits do not get) for working on Sundays.
Cutting employees’ earnings in this way was always going to be controversial, says Melanie Stancliffe, partner at Thomas Eggar LLP. Those smaller companies thinking about making a similar move should consider their position carefully. “There’s nothing to prevent an employer offering its employees new employment terms; a lot depends on whether the contract allows the change or not.”
Still, whether a Sunday-working premium is specifically written in black and white or is more loosely ‘discretionary’, any employees who refuse the change and are dismissed will contemplate legal claims, Stancliffe warns: “The key issue for any employer is whether they can justify what they are doing – basically, is it a fair and reasonable business decision to change the pay for staff? The tribunals will take all the factors into account, including Next’s general profitability.” She highlights likely complaints of Next employees for unfair dismissal because of their age/longer service.
In most cases, greater pay equality between new hires and existing staff is laudable – Next has that advantage – but the issues are wider, Stancliffe says. Internally, the morale and motivation of remaining staff will be a concern: “They may seriously doubt their value if their employer won’t keep to the terms agreed, which employees legitimately rely on. More damaging are the allegations of disrespect to family life and religious values in seeing Sunday working as a norm and willingness to change employees’ terms when they no longer suit the business.”
For those no longer paying more to employees prepared to work on Sunday, a negative impact on staff recruitment must be expected, Stancliffe says, not to mention the potential damage to customer allegiance to the brand. “With increasing desire for ethical business practice, this is an extremely unhelpful public dispute for Next.”
Next’s efforts to consult staff and resolve the dispute privately are unclear. But before embarking on a change to Sunday working, employers of all sizes should weigh up the various costs and impact on its reputation, against the financial saving, then seek to discuss it with the affected staff/unions, Stancliffe advises. “As the market gets squeezed, the short term reduction in the fixed cost is understandable. Time will tell if was worthwhile.”
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