Changing Employees' Hours of Work

11 October 2013

Reducing employees’ hours is one way of keeping your team together in difficult economic circumstances. How do you manage this to ensure minimum stress and maximum benefit for all?

As architectural practices continue to face uncertain economic times, some are reducing employee hours in an effort to keep all their staff on while also addressing straightened business circumstances. This can be a good way to keep valued staff in the practice and teams together while the practice works to return to a stronger economic footing.

However, employers do need to ensure that proper processes are followed and that changes are agreed to and documented. Effective communication is also vital, as in so many other business and workplace situations. When staff members understand the context in which their hours – and therefore income – are reduced, they are more likely to pull together and work with you to improve the business’s situation.

Your formal obligations depend on the conditions under which your staff members are employed. Where a staff member is employed as a casual, hours can be readily changed in response to changing business needs. In contrast, reducing the hours of a full-time employee to that of a part-time position comprises a change to their contract.

Michael Corrigan of Platinum Employee Relations advises that when a full-time employee’s hours are reduced to part-time due to a downturn in business, the employee must be given two choices:

  1. Accept the part-time role and stay on with the company. In this context, they must be given the appropriate notice as per the award and the national employment standards.
  2. If the employee does not wish to go part-time then they need to be paid redundancy payments. 

Employers should provide a written description of the proposed changes and, if the employee agrees, there needs to be an acceptance in writing. As an employer you cannot simply amend the contract without your employee’s consent – to do so is to risk a breach of contract claim. If the employee agrees to the changes, the revised arrangement should be properly documented and signed by both employer and employee. In a short article on the topic, Tress Cox Lawyers advise that “Care should also be taken in ensuring that the employee agrees that no redundancy entitlements arise from the variation in their employment.”

This is a potentially sensitive situation, and needs to be handled carefully to ensure that staff morale is not damaged, as this could easily generate further negative impact on your business. Tress Cox highlights the importance of communication:

“In our experience, a strategy of open communication, including clearly explaining the reasons for the requested reduction in hours to employees and outlining the benefits of reduced hours (such as a greater work-life balance), can lead to a ‘win-win’ situation for both parties. It is important though that employers do not direct their employees to reduce their hours.”

As you prepare to talk to your staff, consider what the advantages could be for them. Reducing to a four-day week, for example, could be a chance for some to explore opportunities that are more difficult in a busy work environment – for example, it could provide a window for some to take on sessional teaching, or other ‘extra-curricular’ activities within the profession. Are there ways that you can help them access such opportunities?

It is also helpful to give staff a clear understanding of the context in which an employee’s hours would increase or return to full time, and even what role they could play in assisting the business with this.

You need to use similar processes of documentation, communication and agreement when returning employees to increased hours. When planning to increase hours again, you should also be mindful that employees might need to negotiate new circumstances. For example, if an employee has taken on other commitments or has reduced childcare arrangements in response to reduced hours, they may not be able to drop everything and return to longer hours immediately.

You also need to be aware of your obligations should employees elect to take redundancy rather than agreeing to reduced hours. (See the Know Your Award item on Redundancy.)

Have you reduced employee’s hours as part of a strategy to respond to reduced business workloads? We would be interested to hear about this. What is effective? How did you manage the discussion? What was the response of your employees?

Further resources

There is not a great deal of information on this topic readily available. However, two useful resources follow:

Alternatives to Redundancy 
This article from Tress Cox Lawyers includes a short, straightforward account of how to manage a reduction in hours both formally and in terms of good communication.

Being asked to reduce your pay or your hours of work
The Irish Citizen’s Information website provides some good advice for employees faced with a decision about whether to accept reduced hours. Please be aware that this is an Irish site, and therefore the advice refers to a different legislative context. Nonetheless, it provides a good outline of the issues and would be useful for employers, as well as being a resource for employees.

This article was first published in ACA Communique, October 2013. 

comments powered by Disqus