Last week, The MJ led with an exclusive story that Local Government Employers were considering scrapping the Green Book which lays down terms and conditions for local government staff. Employment lawyer, Huw Rolant Jones, looks at the feasibility of such a move

In a recent survey, undertaken by Eversheds, it was revealed that 91% of council respondents believed job losses were their greatest challenge, with 61% planning changes to employment terms and conditions, and 67% other employment practices.

The MJ led with a heading ‘Employers “planning to tear up” the Green Book’ on the front page of its 14 October issue. However, any changes to the Green Book present challenges to employers, both from employment law and a wider industrial relations perspective.

An employment contract may be amended only in accordance with its terms, or by agreement between employer and employee.

In short, if the changes are not authorised by the contract itself, there are three ways in which an employer may vary the contract of employment:

seek the consent of employees – on an individual or collective basis

unilaterally imposing the change and relying on the employee’s conduct to establish implied agreement to the change

terminating each employee’s employment and offering re-employment under the new terms.

In the current climate, trade unions are understandably reluctant to negotiate less beneficial terms and conditions on behalf of their members, and employees will take some persuading to voluntarily agree to more detrimental terms. As a consequence, a number of authorities have embarked on a process which could result in the termination and re-engagement of significant numbers of their workforce.

Whereas, historically, part three of the Green Book has always been fertile ground for collective local negotiations, more imaginative and potentially-far reaching solutions are required as a way around part two of the Green Book.

There are those who firmly believe that collective consultation on a national level is the way forward for local government, although many are of the view that the time has come to renegotiate the Green Book on a national basis. Others have decided to take the challenge into their own hands by, in effect, circumventing part two.

Clearly, any decision to terminate and re-engage large numbers of employees will not be taken lightly by any council.

However, with the increasing reluctance of the trade unions to enter into collective agreements to facilitate the implementation of single status, those councils which have not yet implemented are increasingly prepared to consider implementation of single status by force, also using this as an opportunity to make wider changes to terms and conditions of employment. Changes to sick pay – not paying sickness absence for the first three days of sickness absence – is one such example.

Any dismissals, even with the offer of re-engagement, carry the potential risk of unfair dismissal claims and councils, if challenged, would have to rely on one of the recognised potentially-fair reasons for dismissal. Councils will most likely be relying on ‘some other substantial reason’, but a sound business case will need to be argued in the event of challenge.

Labour law provides minimum collective consultation requirements, depending on numbers of employees affected of a minimum of 90 days in the event that it is proposed to dismiss and re-engage 100 or more employees. Ordinarily, this minimum consultation period will be in addition to the contractual notice period. Notice can only be triggered in most circumstances following the expiry of the collective consultation period.

Employers will also need to be careful to avoid any changes which could be perceived as being discriminatory against a particular group of its employees.

Employees are also advised to ensure that proper consideration is given to equality issues, including undertaking gender-impact assessments so as to avoid another raft of equal pay claims.

Councils will have the option of incentivising employees, usually in monetary terms, to accept the new terms and conditions but, given that the primary driver for the changes is cost savings, the scope for such incentives will be limited.

However, the financial constraints facing councils can provide the basis for them to make bolder decisions to explore solutions that perhaps might not have been contemplated in the past. Trade unions will also need to carefully consider the implications and options available to them, as changes to terms and conditions could be more palatable than large-scale redundancies.

Communication strategies will be key for both councils and trade unions. Hearts and minds will have to be won, and councils will need to ensure that their employees understand the difficult choices that have to be made and the rationale for pursuing particular options.

No-one is pretending these are easy times for councils and inevitably, employees will be a target for cost savings. Working with trade unions and seeking individual and collective consents to changes to terms and conditions will be the preferred approach of most councils, but the legal framework allows for them to consider other options.

Huw Rolant Jones is partner, human resources group, Eversheds