Extending notice periods

We would like to extend the notice period of several of our senior managers. What legal rights do we have if they are not happy for us to change their employment contract? Do we need their consent?

When seeking to change employees’ terms and conditions, you should first look at their existing contract terms. If the contract contains a variation clause which entitles you to extend the notice period, you have the contractual right to amend the contract in that regard. Having said that, the right to vary the contract must be exercised reasonably – ie, the variation itself must be reasonable and the employees given a reasonable period of time to consider it. If, for example, you wish to extend the notice period to say six months, that is unlikely to be considered acceptable for all but the most senior staff.

In the absence of a variation clause, you do not have the right to vary the contract, and you must seek the consent of your employees. If they do not agree to the variation you could seek to impose it, but that is likely to be a breach of contract and could expose you to claims of constructive dismissal.

The alternative option would be to give notice to terminate the employees’ existing contracts, and at the same time offer them new contracts containing the new notice period. That option also carries risks, in that the employees could claim unfair dismissal in respect of the termination of their original contracts.

In short, to avoid the risk of litigation, you need to obtain your employees’ consent to the variation unless the existing contract provides for the change to be made. You may find that offering a cash incentive will assist in obtaining consent.

By Jacqui Parker, partner, Simpson Millar

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