Changes on the high street – Employers get informed
Kathryn Walters, a senior associate in the employment team at Clarke Willmott, looks at key employment law considerations for retailers in the current market.
Ted Baker has in the past couple of weeks announced the closure of many of its UK stores, which means the loss of hundreds of jobs. This comes hot on the heels of The Body Shop, another iconic retailer who, earlier this year, was forced to close nearly half of its UK stores.
Financial difficulties, and a move away from the traditional high street business model, is something that many retailers are currently grappling with. There have been significant changes to how, when and where consumers shop, and what consumers expect of their shopping experience, compared to when many retailers first set up shop on the high street. Retailers have to adapt to commercial and societal changes in order to survive, and while unfortunately this is not always possible, being informed of rights and obligations in how to deal with their workforce in times of change is imperative.
There are some key employment law considerations that retailers should bear in mind when faced with a need or preference to change their existing business model to reduce the workforce, or completely ‘shut up shop’.
- Redundancy – Employees with more than two years continuous employment will have unfair dismissal rights, and therefore employers are at risk of Employment Tribunal claims if they fail to follow a fair dismissal procedure. While redundancy is a fair reason for dismissal, employers must ensure that they follow a fair procedure which involves consulting with employees. Where there are large scale redundancies of 20+ employees, specific timescales must be followed.
- Administration – Going into administration does not always mean that a company will go out of business or that all employees will automatically have their contracts terminated. When administrators take control of an ailing business, there are a range of steps they can take which can result in several outcomes for employees.
- TUPE – In many cases administrators will sell a company, or parts of a company, to a third party which may trigger the Transfer of Undertaking (Protection of Employment) Regulations (TUPE). For employees that would otherwise lose their job, this offers a lifeline, and new employers need to be mindful of the automatic transfer provisions that apply.
- Contractual variation – The need to make changes does not always mean dismissal or closure, and instead employers may want to explore changes to the business model which would allow them to diversify and adapt to consumer expectations. Employers should be mindful of consulting with employees before varying contractual terms, not only to comply with legal requirements but to safeguard employee relations and workforce retention.
- Flexible working – Particularly since Covid, there is an expectation amongst employees across every industry that they will be afforded flexibility in how, when and where they work. With the right to request flexible working being a day 1 right, this is something that employers should be mindful of and they will need to deal appropriately to avoid reputational and possible financial consequences. However, this can also present an opportunity for retailers who need and want to change their business model away from the traditional 9 – 5pm high street model.
Speak to a specialist
It is clear that the retail space is evolving, our specialist employment team is on hand to offer support and advice for retailers and employees in this sector. Working with owner-managed businesses, SMEs, charities, large listed companies and other organisations, we can deal with all employment issues, from providing guidance on day-to-day workforce queries, to advising on restructuring and outsourcing projects and employment tribunal claims.
Contact our team on 0800 652 8025 or request a consultation
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