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Boss wants to reduce my wifes hours


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My wife was employed as a shop assistant when the local village shop was taken over by a new owner. She started on the day he took over the business just over 2 years ago. Since that day she has worked consistently over 25 hours a week, with an average over the 2 years of 31 hours a week.

 

She has never been given, or offered a contract, but is paid through the books with pay slips, holiday pay and pension etc.

 

There is a flat attached to the shop, and for some months its been empty. The boss wants to let that flat out on a private rental, but there is a codicil attached by the people who actually own the shop that whoever lives there must work at the shop and it cannot be rented out to anyone other than an employee.

 

My wifes boss has come up with the idea that he will rent the shop out, but to swerve the codicil he will be giving the new people some hours at the shop.

 

He has said that he will therefore be reducing my wifes hours to 20 hours a week, which in all honesty would cause us severe financial problems.

 

When he told my wife the plan he explained that because there is no contract, no hours are guaranteed and that she is actually therefore on a zero hours contract. This is HIS interpretation of it, and therefore he can reduce the hours as he sees fit.

 

Surely he is incorrect, and that because she has consistently worked an average of 31 hours a week, this is an implied contract and any changes to her hours MUST be agreed by her before he can go ahead. As far as I am aware, it is his responsibility to ensure that if he wants staff to be on a zero hours contract, he must say that when he employs people, and must provide a contract of employment that states this. He cannot employ someone on full time hours, then decide later on that because there is no contract in place he wants it to be a zero hours contract.

 

What are my wifes rights here, and what should she do to approach her employer about it.

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Surely he is incorrect, and that because she has consistently worked an average of 31 hours a week, this is an implied contract and any changes to her hours MUST be agreed by her before he can go ahead. As far as I am aware, it is his responsibility to ensure that if he wants staff to be on a zero hours contract, he must say that when he employs people, and must provide a contract of employment that states this. He cannot employ someone on full time hours, then decide later on that because there is no contract in place he wants it to be a zero hours contract[/Quote]

 

It isn't always straightforward and ultimately such matters can only be properly determined by an Employment Tribunal, however a few things that could make life difficult for the new owner.

 

1. Is there any mention of working hours on each payslip? I mean 'Is there a note regarding 'Basic' and/or 'Overtime'?' Is the holiday pay variable based on hours worked or paid at a flat rate? If the latter then that could be evidence of 'core' hours' The lack of a contract does not help the employer - implied terms and Custom & Practice arguments would certainly be stronger where there is a lengthy history of more hours being worked, especially where there is no evidence of the 'extra' being considered as optional or paid as overtime

2. A Contract DOES exist and need not be in writing to be binding on both sides. By attending work and by the employer remunerating the employee for attending (as evidenced by payslips) this forms a contract - the written part should contain the core elements and the finer points of the arrangement, but in the absence of such an agreement the relationship could be argued to have been formed on Custom and Practice over an extended period of time

 

In reality, an employer CAN vary a contract by giving notice and ideally entering proper discussion and terminating the contract if needs be. The employee can of course resist and sue for Constructive Dismissal, but this rarely compensates the employee adequately, especially where the employer offers to mitigate the loss by re-engaging the employee on the reduced hours and by offering to buy the employee out of their existing contract. It would however be extremely inconvenient and expensive to defend a case and the employer would almost certainly not wish to explain in Court the arrangements regarding the covenants in place for the accommodation

 

As for the best way to approach this? Hard to say as the employer will no doubt be looking for any opportunity to get rid of your wife as an employee. Your wife would however be well advised to get any proposals in writing and if necessary seek qualified legal guidance in addition to asserting that she considers her contract to be binding even if not written

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It isn't always straightforward and ultimately such matters can only be properly determined by an Employment Tribunal, however a few things that could make life difficult for the new owner.

 

1. Is there any mention of working hours on each payslip? I mean 'Is there a note regarding 'Basic' and/or 'Overtime'?' Is the holiday pay variable based on hours worked or paid at a flat rate? If the latter then that could be evidence of 'core' hours' The lack of a contract does not help the employer - implied terms and Custom & Practice arguments would certainly be stronger where there is a lengthy history of more hours being worked, especially where there is no evidence of the 'extra' being considered as optional or paid as overtime

2. A Contract DOES exist and need not be in writing to be binding on both sides. By attending work and by the employer remunerating the employee for attending (as evidenced by payslips) this forms a contract - the written part should contain the core elements and the finer points of the arrangement, but in the absence of such an agreement the relationship could be argued to have been formed on Custom and Practice over an extended period of time

 

In reality, an employer CAN vary a contract by giving notice and ideally entering proper discussion and terminating the contract if needs be. The employee can of course resist and sue for Constructive Dismissal, but this rarely compensates the employee adequately, especially where the employer offers to mitigate the loss by re-engaging the employee on the reduced hours and by offering to buy the employee out of their existing contract. It would however be extremely inconvenient and expensive to defend a case and the employer would almost certainly not wish to explain in Court the arrangements regarding the covenants in place for the accommodation

 

As for the best way to approach this? Hard to say as the employer will no doubt be looking for any opportunity to get rid of your wife as an employee. Your wife would however be well advised to get any proposals in writing and if necessary seek qualified legal guidance in addition to asserting that she considers her contract to be binding even if not written

Thank you for the response. On my wifes pay slips each week it simply says the number of hours worked in total and holiday pay is calculated by an average of the previous 12 weeks.

 

if my wife were to refuse to accept any reduction in hours would he have to dismiss her or would ahe have to hand her notice in and explain why with notice that she intends to claim constructive dismissal ? Also if he did dismiss her for not agreeing to take a reduction in hours what if any recourse would she have.

 

Finally and sorry to hassle you further, you mention that he could offer to buy out her contract. How would this work in practise. How would it be calculated and could my wife write and suggest if he wants to do this he can make her an offer. ?

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I should clarify that claiming constructive dismissal is not at all easy and most cases lose. If you intend to go down this route, as an absolute minimum you will need to go through a full grievance procedure - your wife cannot just resign and make a claim.

 

Sidewinder is also correct that it will be inconvenient and expensive for the employer to defend a case. It will also be expensive and inconvenient for you to lodge one! A tribunal these days costs £1250. And if you require a lawyer you will pay for that too. It is unlikely that a no win, no fee would be interested in a case like this - the chances of losing would be high, and the remedy low. It is possible to do it yourself - but it is very stressful and time consuming.

 

And any way you cut it, you need to be prepared for your wife to have no job there. If you genuinely cannot afford a cut in pay off a few hours a week, how will you manage with none?

 

I'm not telling you this to put you off. I just think that Sidewinder has painted things a little too rosy - or you have taken what they have said that way. You need to fully understand that there are consequences of actions suggested - the shop owner might not like your response and it might be inconvenient, but I doubt you will find their response any more convenient or useful. You must therefore balance your options and make choices based on fully understanding your choices and risks.

 

One thing I do disagree with in Sidewinders post. I actually can see the shop owner being happy to discuss the covenant in a tribunal. Because that is their defence. And it goes like this. This is a small village shop. They struggle to be viable in relation to the competition and mobility of their clients. These things are underpinned by national experienced - small village ships are closing at an alarming rate and have been for decades now. In order to make the business viable he needs to rent out the flat but the covenant prevents him doing so unless he offers work to the occupants. If he doesn't do this then the shop closes and your wife is redundant. So she had no job at all. If he incurs extra staff costs this will still make the business unviable and he will end up in the same situation - the business closes and your wife loses her job. His solution of reduced hours is the only option he has to save the business and her job. That is a viable defence and one which a tribunal will accept - reductions in terms to save jobs and businesses is a valid defence. And actually, may be true!

 

As for some sort of settlement, her contract isn't worth much. She has only just over two years service. So her redundancy pay would be at most two weeks (depending on her age). It's unlikely the contract would be deemed to be worth more than that, and it would be just as cheap to actually make her redundant, so he might as well! Equally, if it were to go to tribunal and she won, it is not likely she would get a lot more than that. Unfair dismissal is not as "lucrative" a claim as most people think. Unless he were to do something far more drastic than he has so far, compensation for this kind of breach, with a good defence, is likely to be low.

 

All of this depends on him being clever enough (or having a lawyer clever enough) to argue the defence I outlined. It isn't rocket science. "Needs of the business" is a common defence, and does not have to be proved - if the employer says it is so then the tribunal must accept that. However, quite apart from this, you must be prepared that any action to dispute the employers wishes MAY result in your wife losing her job. Fairy or unfairly is irrelevant, except in the case of a tribunal claim. She will still be unemployed. Few employers are sanguine about their employees taking action against them.

 

There are other options not mentioned so far. The obvious one is to suck it up until she can get another job. The other is to suggest a better solution. Could she afford to drop a couple of hours - if the covenant is so wide as to simply require someone to work in the shop, two hours a week could do it. The other possibility - and I am a little out of my depth without researching this one - is to point out that this would create a tied tenancy, and that this is a whole new area of legal problems! There is certainly separate legislation on the rights of people in accommodation which is tied to their work, and this would be the case if they MUST work in the shop as a condition of living in the flat. There are also tax issues - again I am a little out of my depth, but the value of the rent or part of the rent in tied accommodation is viewed as income by HMRC. It may be that doing a little research yourself would give her ammunition that makes the whole idea more difficult than it is worth. That said, if it is indeed the case that without this rent the guy doesn't find the business viable, she could be out of a job! So she may need to be careful what she suggests.

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Long shot, but why don't you offer to find a tenant that only needs to work a couple of hours a week.

Maybe someone you know who wouldn't mind helping you out and is looking for a flat to rent.

Or even someone who works from home and wants to get out of the house for a few hours.

Maybe by offering to look for a suitable tenant yourself might keep him sweet, of course if you want to do it.

Mind you, if the tenants then destroy the flat or don't pay rent he will blame you.

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Agree, it is not a zero hours contract, it is an implied contract as far as hours go and after 2 years that is as good as a written one. However, this can be varied or a new contract offered for the old excuse of "operational reasons". If she doesnt accept the new contract then she is in effect redundant and that wont get her much of a pay off- 2 weeks pay.

Sangie's point about the renting of the flat being a benefit in kind is a good one and if the rent is less than the commercial norm there is an argument that this is then a taxable benefit and that will cause headaches for both the tenant and landlord, especially as a tied lease. If the shop used to be a sub post office it may be very difficult for her boss to get round this covenant

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