Sunday trading restrictions: How changes affect SMEs

Ben Williams, barrister at Kings Chambers, discusses how small businesses can prepare for the mooted loosening of Sunday trading restrictions.

It took an act of Parliament to allow shops to extend their opening hours during the London 2012 Olympics. Now, the debate over whether to loosen Sunday trading restrictions in England and Wales has been reignited as the prime minister’s official spokesman was quoted saying that “a lot of people will want to look at the issue”.

The Institute of Directors (IoD) is keen to allow retailers a free reign, but others have raised concerns over the impact on employees. From a legal perspective, there is a range of considerations that employers would need to make.

In 2012 it is not unusual for a business to open on Sundays, but in these hard economic times, some may wish to capitalise on a full week of trading or operation. However, business owners need to be well aware that if you have not previously opened on a Sunday for example, then unless your staff agree to a change or increase in their hours, this may not be a straightforward process.

Simply imposing more hours on your staff would provide good grounds for staff to resign and claim constructive dismissal. Further, certain individuals may object to working on religious grounds, and this could lead to claims for discrimination on the grounds of their religion or belief under the Equality Act 2010.

Working Time Regulations

Aside from these considerations, employers should always be aware of the Working Time Regulations which limit an employee’s working hours to 48 hours (averaged over 17 weeks). You may wish to consider employing extra staff to cover an increase in the working week, although for many businesses this will be counterproductive as it may entail an increased cost in training such staff, not to mention the supplement in wages for weekend working that has traditionally followed.

Employers will need to carefully plan so that they can fully cost up the benefits of additional hours, weighed against the potential detriments of increased employee absence that employers have anecdotally reported. Employers are therefore well advised to have clear absence policies.

Of course, any agreement amongst staff is always the best outcome for a change to any contractual terms. With this in mind, employers may wish to incentivise staff by offering an additional reward for working at weekends in the form of increased pay or additional holidays; this is of course a matter for them.

Any agreement to change should be reflected in writing, and any such incentives must be evenly applied. But what if there is no agreement and you have decided that opening a further one or two days a week is necessary for the business? The following is intended to be a helpful guide for such a scenario:

  • You will need to formally consult with all those employees who are affected. This means you will need to timetable a meeting (or a series of meetings) during which you can explain the business reasons behind the proposed changes.
  • It is key that you show the genuine business reason behind the proposals. It is a matter for you how you do so, but the clearer the better. If your explanation is unclear then this may lead to scepticism and thereafter resistance from your staff.
  • You will need to give your staff time to consider your proposals, allowing them to come back with their own suggestions for you to then consider. Put simply, this consultation should be genuine.
  • If there is no agreement following your consultation with your staff, then you may seek to terminate the original contracts then re-engaging your staff of new contracts which reflect the change, ensuring that there is sufficient notice of the same.

Unfair dismissal risk

Employers should be aware that such processes may still result in claims for unfair dismissal. However, if you can evidence your genuine business need and you have followed a fair process, such claims will likely be defeated as you would rely on ‘some other substantial reason’ for the dismissal.

Notwithstanding the above, employers are well-advised to invest in legal advice in advance of any such change. It is important not to be dissuaded from improving the profitability of your business simply because your staff may resist such a change. Employees need to appreciate that they may need to adapt with the business, for this could be the difference between redundancy and gainful employment.

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