Is it Legal to Reduce an Employee's Working Hours?

It’s not uncommon for businesses to reconsider part of an employee’s contract while they’re working with you. Sometimes it’s an essential requirement.

And during these difficult times, this is a particularly important consideration. We have a coronavirus business support centre to help you make the right decisions.

You can also talk to us on 01455 858 132. We’re here to help.

And in this guide, we discuss the legalities behind reducing work hours. Is it a suitable option? We’ll take you through your options.

Can an employer reduce hours at work?

So, can you legally reduce employee hours? Yes, it’s legal—so long as you can justify your need to do so.

For the reduction in working hours, employment law does require you to provide a legitimate reason.

And it’s important to remember you keep your employees well informed during the process.

You’ll also need to gain their agreement on the new hours you have.

After this, with the process finalised, you can update their contract and provide them with a written notice of the change. It’s essential you follow these steps.

So, is it illegal to reduce employee hours? No, in the right circumstances it’s fine. But it’s advisable not to change an employee’s hours without a warning.

It could result in legal consequences for you, such as a claim for a breach of contract.

To go about reducing staff hours in the UK you need to address the issue with your employee first. And then you can go ahead and make a change.  

Reducing working hours and UK law

During times of business downturn and uncertainty, you may consider making changes to the terms and conditions of your employees’ contract.

One change involves reducing their hours of work. There are common reasons for reducing working hours. These include:

• Pay rises or decreases.
• Change of duties.
• Change of working hours.
• A change in the business’ situation.
• To account for a decline in the demand for your product or service.
• To reflect changes in duties and responsibilities.
• Lack of work activities for an employee to carry out.
• More serious matters—such as the coronavirus pandemic.

As we mention above, you can make reductions in working hours according to employment law. Depending on the contract, they can be permanent or temporary reductions in working hours.

But remember to gain an employee’s consent either way as it may impact things like breaks and salary.

As an employer, there are three main instances where you can change a contract of employment. This is if:

1. A flexibility clause allows for the change.
2. The employee agrees to it.
3. A representative of the employee agrees to the change on their behalf.

If you’re unable to reach an agreement with a member of staff, you may also consider a forced reduction in working hours.

It involves dismissing and re-engaging the same member of staff under the new contract. That approach should be a last resort, though.

Keep in mind that this doesn’t necessarily address any performance issues and staff members may challenge it based on fairness and consistency.

You can also seek to impose the changes unilaterally. However, the risk here is staff will refuse to work, resign, or work under protest.

It could also lead to claims of constructive dismissal.

How to reduce employee hours

Reducing the working hours of your staff is a delicate issue.

If done incorrectly, you may open yourself up for claims of breach of contract or discrimination from your employees.

For example, if you’re reducing employees hours due to poor performance then you need evidence to support your claim. However, this is a contractual right and you should avoid this.

So, your approach to taking this step (reducing staff hours) will depend on the reason for needing a change.

The first and most important approach is to have an open and honest conversation with all those affected. Explain:

• The reason for the reduction.
• How you decided whose hours to reduce.
• The new proposed hours and pay if applicable.

Remember to provide all affected employees advance notice of the changes you wish to make. Once you’ve agreed on them, you’ll need to update the contract.

You must also write to all affected employees within a month explaining the changes made and how it'll affect them.

There’s a sample letter of this further below you can refer to for your records.

How to reduce hours for part-timers

When you approach reducing permanent part-time hours, it’s essential to remember these members of staff still require fair treatment.

You can’t view them less favourably than your full-time employees. This is the same for any of the other staff you have:

When reducing part-time employees hours, you need to approach the part-time employee in the same way as detailed above.

So, that means you need a legitimate reason to reduce hours. And you should look to provide them with an update about your decision as soon as possible.

Finally, provide them with written notice when you have finalised the process.

Of course, remember you can still furlough these employees during the coronavirus crisis. So keep this in mind as an option. That’s provided they were on furlough previously.

Reducing hours at work due to coronavirus

As we explain above, you can’t simply reduce an employee’s hours (or pay) without first getting agreement from the member of staff in question.

However, if you have an employment contract with the employee that provides the right to do this then, yes, you can make the changes.

But you still have to make sure you make those changes for a genuine reason.

Obviously, during this pandemic you can argue that you do have a genuine reason for this decision.

At present, your decisions will typically come across as reasonable given the circumstances. But it’s still good business practice to verify any changes with an employee, so as not to strain your relationship with them.

So, you should always make sure you receive their consent. If you don’t, they may resign—and they could make a claim for constructive dismissal.

If you do make a reduction, and the employee agrees to the change, then you should provide the details to them in a letter.

But before you take that final step, remember that the UK government has the Job Retention Scheme in place.

With that, you can make a claim for furlough—this places employees on a percentage of their wage (which will change in the months leading up to October 2020).

They’re, essentially, on temporary leave from your business. However, you can only do this is the employee was furloughed previously.

We have a furlough navigator tool available for your business if this is a step you wish to take. It easily helps you to keep track of staff details and current laws.

However, if you want employees to continue working—but on a reduced workload—then you can take the following steps.

How to reduce hours at work due to coronavirus

You should follow the steps we cover above, with the knowledge you likely have a reasonable reason to make these changes.

So, you can follow these guidelines:

1. Inform the affected employees there’s a reduction in their working hours.
2. Provide a reason for why this is the case—employees will likely remain understanding during the current world events.
3. Provide staff with a written letter of notification.

During this time, it’s worth considering the hours of reduction you’re providing.

An employer’s letter to reduce working hours at work will address this. If you’d like to go ahead and reduce the number of hours of an employee (and you have their consent), you can refer our template via the link.

Can an employee reduce their hours?

Just like you can alter an employee’s contract of employment, you may receive a reducing hours at work request.

Staff can do this to, for example, gain a better work-life balance. Or to meet other out-of-work obligations.

They can make requests for flexible working if they have at least 26 weeks’ continuous service, which you must reply to within 28 days of receiving the application.

While you can decline the application, you’ll need to justify this based on one of a number of sound business needs. For example:

• The impact it’d have on product quality.
• The impact to meeting customer demand.
• To support business requirements during the pandemic.
• If you’re choosing to furlough employees instead.

Phasing a return to work

Over the coming months, we can expect to see the UK government to lift current lockdown restrictions. If not fully, then in stages.

So, a return to work with reduced hours may be a suitable option for your business sometime soon.

Throughout all of your decisions, you should take into consideration your duty of care to staff. And the health & safety requirements you need to meet.

Before agreeing to do so, you should assess your working environment to see if you can bring staff back. Consider:

• Is it essential to return employees to work?
• Is it safe?
• Have your employees agreed with your request?

To bolster their confidence going forward, you may want to offer a return to work—but with fewer hours.

As we detail in this guide, you’ll need to agree any of these updates with employees.

You’ll need their consent to any hours you decide upon. However, if they agree then you can update their contracts.

Ramadan and reduced working hours

Ramadan is the holiest month in the Islamic calendar. In the UK, it ran from Saturday 23^rd April 2020 to 23^rd May 2020.

As the time involves Muslims abstaining from food and water during certain hours, many employees observing Ramadan may have more energy during the day.

The result is you may want to consider offering flexible working, such as a reduction in hours. Or an employee may request this from your business.

If this is the case, you can discuss the matter with the employee in question.

Although you’re under no obligations to agree to any requests, staff can still submit holiday requests around this period.

And you can choose whether to agree to these.

Your business will need a genuine reason for not agreeing to a request, so make sure you treat a reduction in hours fairly.

If, for example, your business is extremely busy, then you may require the employee to remain in work.

You can discuss this with them to make sure you can reach an understanding.  

Reducing hours at work—calendar software

Finally, if you feel you need support with working out your employee hours, you can use our online HR software.

You can use it to work our hour reductions for staff and monitor the working week.

It can prove a major time saver during stressful times. So you can easily recognise when to let staff know they’re hours are returning to normal.

Expert advice

If you need any assistance on reducing hours during these difficult times, contact us today for immediate support: 01455 858 132.