We have just bought a small shop and Post Office, the shop employs three staff members, which we have inherited. The owners previous to us were not in good health, which is why they had more staff than we actually need and more than the business can sustain. Is there any way we could cut their hours by law, or to even get rid of them altogether? None of them have a written contract and all of them are 60+ in age.
Starting with the last part of the question, the fact that an employee does not have a written contract or that they are over 60 years of age (providing it is not over 65) is irrelevant. They do in fact have a contract of employment.
Most contracts of employment are actually verbal with a job offer having been made; the offer is accepted and consideration which usually includes pay, plus things like holiday pay, sick pay, etc creates the contract. What employers are required to do by the Employment Rights Act 1996 is to provide written particulars of main terms and conditions after one month’s employment and in any event by two months. Failure to do this renders you vulnerable to an automatically unfair dismissal since the statutory disputes resolution procedure is based on the fact of there having been a proper statement of Main Terms of Employment produced, with supporting documentation. Supporting documentation (usually a handbook) should set out the disciplinary procedures. Failure to issue a contract would mean that if you lost a claim for unfair dismissal or even if you won it and had not issued a contract you could face either a two or four weeks’ pay as a fine. In addition, since it is highly unlikely if you have not issued a contract statement that you will have complied with the terms of statutory disputes you risk an uplift of any award by up to 50 per cent. It would therefore be extremely prudent to issue contract of employment statements immediately. These should reflect the current contractual terms that you have inherited from the transfer and therefore since they should reflect the existing terms there should not be any problem getting people to sign for receipt of them.
In terms of having too much resource in the sense of too many attended hours then the thing you should do is to consult with the staff, explain the problem to them, explain the number of hours that are being worked and what you believe to be ideal number of hours thereby identifying the number of hours that need to be reduced. It may be that the three of them, given their age, might be looking to reduce their hours. You may of course be unlucky that all three of them might wish to increase their hours! But the starting point is to discuss the problem with them. If you can get agreement for them to reduce their hours either by a straight forward cut of x hours per week each or perhaps some sort of rolling roster of reduced hours then you will solve the problem by agreement with relatively few problems. Clearly that agreement needs to be documented. However, if nobody is willing to reduce their hours and you still need to reduce them, you can do so and since this is a transfer of the undertaking your reasoning would be for an economic, technical or organisational reason (ETO).
You are perfectly in your rights to commence a redundancy consultation. You have to decide as to who should be redundant. The two most common used are “last in first out” (LIFO) or you retain the best and the “not quite so best” leave. It is remotely possible that the current hours being worked are not simple in the sense that to dismiss one of them may well leave you with a total gap on a day when you would need some support and you could find yourself, in theory, dismissing all of them and offering them the alternative which is the hours you have worked out which you need to be worked.
Clearly this is a very sensitive issue involving as it does the Transfer of Undertakings (Protection of Employment) Regulations 2006 and numerous issues under the Employment Rights Act 1996. It would therefore be prudent to take professional advice before embarking on all these changes.
