Retail Rollercoaster: How to Maximise Employment Flexibility as A Retail Employer

Retail sales fell by 0.2% in the UK last month, compared to June 2023, with the colder weather discouraging sales, particularly the purchasing of summer clothing and DIY and gardening supplies. 

Card spending decreased 0.6% in June, representing the first decline since February 2021.

This news comes despite a deceleration of inflation and emphasises the wider pressure retailers face in light of a downturn in consumer spending due to the cost of living crisis.

Despite the dreary figures above, recent statistics appear more optimistic. Year-on-year supermarket sales increased by 2.2% across the four weeks to 7 July, with the men’s UEFA European Football Championships inspiring a rise in beer purchases, crisps and snacks.

The final between Spain and England appears to have sparked a rise in the number of customers upgrading their TVs. Asda announced that they had sold more than 20,000 large-screen, ultra-HD TVs throughout the Championships, and AO World’s TV sales were 54% higher in June than in 2023.

As much as the dull weather dampened everyone’s spirits, it arguably boosted sales of artificial tan and cold and flu medicine, which increased by 16% and 35%, respectively.

Moreover, this month’s general election may lead to a rise in shoppers' spending, given that shopper confidence has immediately increased following the last three general elections.      

Lay-off and short-time working clauses

Lay-off and short-time working commonly occur in industries where work tends to fluctuate.

They are advantageous as companies try to find ways to reduce costs during periods of downturn without permanently losing skilled staff through redundancy.

Generally speaking, short-time working is a temporary reduction in hours or days of work during a given week.

Lay-off involves giving an employee no work during a week while still retaining them as an employee.

Employers in the retail sector may not automatically have the right to lay off staff or reduce their hours just because there is less work.

This may not cause too much of a problem where employees are engaged on a zero-hours contract or on a casual basis.

However, where an employee is engaged on a fixed salary or weekly wage, the employer will remain liable to pay the employee unless there is either an implied right (usually by way of custom and practice) or express wording in the contract to specifically permit this.

Considered notice period

Every employment contract should set out the notice period to be given by the employee and the employer to terminate the contract.

Law requires minimum notice periods, and a contractual notice period can match these minimum periods or provide for more notice.

It’s important to note that the contractual notice period cannot be shorter than the statutory minimum.

Shorter notice periods can grant greater flexibility to retail employers when reacting to sudden industry disruptions.

However, an employee giving short notice may leave an employer in the lurch.

These should be considered properly at the outset of the employment to adequately protect the company's interests.

Employers should also be mindful of other claims that can arise from terminating a contract (such as unfair dismissal, discrimination and whistleblowing claims), and they should take appropriate advice to ensure the risk of such claims is properly considered.

The most common contract is for full-time or part-time employment, but this may not be the most appropriate type of contract in the retail sector.

Different contract types include:

• Fixed-term contracts which automatically expire at the end of a set period. This is particularly useful in the retail sector to engage temporary staff over a particularly busy period, such as the holiday season. These should always include break clauses, so it is important to take advice on any such contract.
• Agency contracts, whereby staff can be hired temporarily through agencies.
• Consultant or freelance contracts, whereby an individual is engaged to provide services self-employed.
• Zero-hour contracts (also known as casual contracts), whereby staff are called on to work as and when required, and there is no obligation to provide regular work, nor is there an obligation on the individual to do the work when asked.
  
  The new government has, however, committed to banning exploitative zero-hour contracts and has pledged to ensure that workers have a right to a contract that reflects the number of hours they regularly work and that reasonable notice of any changes to shifts, along with proportionate compensation where a shift is cancelled or curtailed, is also provided.
  
  Further clarity on this is awaited, but it will likely significantly impact the flexibility afforded to employers in the retail sector. 

An employer's tax and employment responsibilities for staff will depend on the type of contract provided and their employment status.

Employers should ensure they obtain appropriate advice when considering implementing any new contract to ensure these matters are properly considered.