Can we reduce an employee’s hours for operational reasons?
We have recently had a downturn in sales at our store and have had to restructure operations. We asked our employees if they would consent to reduced hours so that we could avoid redundancies. One employee refused.
After failing to find other ways to cut costs sufficiently, we calculated that we will need to reduce her hours for 1 day per fortnight. If we present this to the employee in the next meeting and she still refuses, can we direct her to undertake the change?
Firstly, you should check the specific provisions of the employee’s contract of employment. It may contain provision for the employer’s right to vary terms relating to hours of work in consideration of operational need.
In the absence of such a contractual term, an employer may not unilaterally vary a contract of employment. To do so risks, if the employee does not accept the change, being regarded as repudiating or terminating the contract, in which case the employer may be exposed to an unfair dismissal claim.
However, only major changes to work rosters have generally been found to be a sufficient variation to amount to a termination of an employment contract. A change to 1 day per fortnight would likely not amount to this, depending on your employee’s particular circumstances and how severely it would impact them.
If the employee is covered by a modern award, this will contain a clause requiring employers to consult with employees about changes in their roster or ordinary hours of work. Any applicable enterprise agreement may also contain relevant clauses.