British Airways (BA) Staff Ultimatum
BA are looking to terminate a significant number of staff unless they agree to vary their employment contracts to work for a lower salary , with less annual leave provisions. The time frames being suggested are not at this stage clear, but there have been suggestions of redundancies, contract variations and the dismissing and re-hiring of staff on far less favourable terms.
BA is one of the world’s largest airlines but, like many of the UK airlines, it has been affected by the Covid-19 Pandemic.
In addition to BA, EasyJet have announced that there could be well over 4500 job losses as they will be flying at a lot lower capacity than normal. EasyJet have stated they are going to be running an employee consultation. This followed March 2020 when they asked a significant proportion of staff to take three months unpaid leave and then it was announced that they would not top up staff to 100% if they were furloughed.
Whilst it is difficult not to criticise large companies that are retaining customer cash, not only do they have to make emergency plans but, for the long term it’s going to take a while for them to regroup and forecast future profits.
Can employees be forced to accept new, less favourable, terms?
Clearly you cannot be forced to take unpaid leave or to be placed on furlough as any variation in your contract must be by consent. If an employer forces you to accept unfavourable terms you can issue a grievance or consider yourself constructively dismissed. However, you need to have worked for the company for more than two years to qualify for constructive dismissal and of course you’re going to need to fund yourself during this period whilst issuing legal proceedings , which we know commercially is very difficult for many people. As such, our advice has always been that both the employer and employee communicate and see if there is a compromise whereby both can help each other.
Linked to this, an employee may refuse any variation of their contract if there is no consideration or benefit and they face a detriment. However, ultimately this could lead to redundancy or the serving of notice subject to the length of time they have worked for the employer.
If an employee agrees to any proposed variation / amended terms, they should negotiate and ensure that they understand the time frames involve; not the fact that they could potentially be giving away valuable employment right protection and possibly allowing their employer to sidestep a redundancy payment.
Invariably, if necessary, the company will make a number of redundancies and terminate their staff who do not qualify. This will result in a consultation process, legal costs, and redundancy payments and, as such, it’s always key that the employer carefully consider seeking advice to understand what compromise may be possible within its team.
BA has come under scrutiny as it is unusual that a company would consider dismissing and re-hiring staff in this way. Unite have even gone so far as to say it is using this crisis as leverage to change its staff contacts which is something to benefit the company rather than rescue it. It appears that BA has staff divided between two employment contracts and this has been seen by some as an opportunity for them to harmonise the contracts bringing everyone into line with tougher terms and lower pay.
Apparently, letters have already been sent to at least 12,455 staff advising them that they are at risk of redundancy and, as such, the consultation process will begin. The furlough scheme is slowly drawing to a close come October 2020 so businesses will need to make a decision on those currently being paid by the government. Any business right now has a tough time forecasting when their profits will recommence and when stability will return and yet they will need to decide whether to bring staff back , maybe part-time , in the future, or not at all.
Like the retail and hospitality industry, the airlines have suffered substantially but, we hope they will be operational in mid-June 2020 and that customers will return. As they slowly recover, hopefully we will see an influx of new jobs and re-recruitment. However, how businesses handle their staff at the moment will determine whether their staff will return and or accept any contract at all.
Companies need to make sure that choosing who stays and goes cannot be discriminatory or they will face grievances and claims. A fair, transparent, and thoroughly documented process should carefully be followed.
BA obviously are trying to run the business and stay afloat in this time of crisis and it is understandable that cuts need to be made. In the case of BA there have been no flights and there continues to be a major impact on the tourist industry compounded by the UK Government’s quarantine rules, uncertainty, and the need for action.
At the moment it is said that BA are offering:
Less holiday reduced from 30 to 22 days ; and up to a 55% to 75% pay cut with pay being £24,000 per year, with pay before for customer service managers being up to 35kHowever, there is the potential for extra income to be paid, such as commission from inflight sales with a 5% flex allowance and access to the Company’s benefits of 11% pension including private health, dental and cash care payments, so they are seeking to offer a positive incentive too.
It is important that BA work with Trade Unions and go through the right and fair procedures in accordance with its employee’s employment contracts and their company handbook.
It is interesting to read on social media BA’s customer reactions as Gold Card Holders have expressed upset and have booked other airlines in protest. As such, BA whilst cutting staff and reducing staff overheads appear to be losing custom at the same time so how commercially that will balance out will be interesting to see over time. It does show the impact your staff can have on your brand, and how your ethics and equality practices are noted by customers who are appearing to value and judge companies ,through the pandemic, and beyond when deciding on their long term loyalty decisions. Businesses need to consider the decisions they make now, will have a knock-on effect in the future and on others. Open client communication, ensuring your staff and customers are on board and having an open forum with candour and transparency is sure to go a very long way.
As such, we remain of the opinion that whilst everyone should be aware of their employment rights, it makes sense for both employer and employee to discuss a fair compromise that could help both of them come out stronger. However, if this is not possible, if it is dealt with professionally and ethically hopefully one day the employer can return and speak highly of the way in which the company handled the situation. One should remember that customer loyalty and staff loyalty are so closely related to your brand and can impact on your reputation and goodwill not only now but in the future. As such large companies as well as small companies should realise that the world is watching how they handle a crisis in addition to how they handle their staff thus careful advice and guidance should be taken.