Imposing new terms on employees: the Twitter dilemma?

Twitter has made headlines yet again after its new owner, Elon Musk, has given employees an ultimatum: work long hours at high intensity, or quit and receive 3 months’ severance pay. Employees were given until Thursday 17 November 2022 to make a decision, which was around 24 hours after the ultimatum was given.

The email to staff read: “Going forward, to build a breakthrough Twitter 2.0 and succeed in an increasingly competitive world, we will need to be extremely hardcore. This will mean working long hours at high intensity. Only exceptional performance will constitute a passing grade.”

This announcement came not long after Twitter made half of its workforce redundant (see our Twitter’s mass redundancies article). This may make anyone wonder about Twitter’s tactics, and whether it can afford to lose more staff given that it is going through financial difficulties. Twitter seemingly did not offer any benefits to choosing to stay (besides keeping one’s job), and unsurprisingly some staff have chosen to leave the company. On Thursday 17 November 2022, employees allegedly exited the company in what has been described as a ‘mass exodus’.

Elon Musk had also been calling for Twitter’s employees, who had mostly been working remotely, to return to work in the office.

This news would understandably cause employers and employees alike to question whether Twitter’s actions are legally justifiable. We have therefore taken this opportunity to discuss the legal and commercial implications of imposing certain working conditions on employees and delivering ultimatums as a final resort.

Changing an employee’s terms of employment

Changing employment terms may be desirable. Annual increases in salary and changes to an employee’s job title because of their promotion are examples of changes that are usually mutually beneficial and are unlikely to cause any legal or practical problems for employers.

Imposing longer working hours

Other changes however may be more controversial. An employer should first establish whether a proposed change involves a change to the relevant employment contract. If there is a contractual right for the employer to change the hours of work or to require employees to work longer hours, then this change may not entail varying the actual contract of employment. Many employment contracts allow the employer to impose longer working hours, however, a crucial point to consider is that such clauses usually refer only to ‘occasional’ longer hours according to business need. If an employer decides to change its staff’s working hours every day, this will likely be a contractual change that is not agreed and may be a breach of implied terms.  A right to change working patterns and hours would need to be drafted very clearly and then must not result in a breach of working time or indirectly discriminatory.

It is worth mentioning that any ambiguity in the terms of the employment contract will be construed against the employer as the party who drafted the terms. In addition, even if there are flexibility clauses in a contract, such as a general permission for the employer to vary the terms, these clauses will be given a restrictive interpretation by the courts.

Removing the permission to work from home

Employers who are considering following in Elon Musk’s footsteps and revoking their existing policies allowing employees to work from home should be aware of the following:

• Employees who were recruited during or after the pandemic may have a term in their contract explicitly stating that their place of work is from home;
• Where employees have been allowed to work remotely on a regular basis, even if their employment contracts do not mention this, there is a chance that the contracts have now been varied by custom and practice. This means that a reversal of this would require employees to consent as it would constitute a change of terms notwithstanding what is written in the contract.
• Hybrid policies should be written carefully so that it is not a one size fits all and there can be changes to when and how people work from home depending on role, performance, promotion or other circumstances.

Other legal implications to consider

• If employees are offered an ultimatum in the way that Twitter has done, then employees who choose to leave the business may have grounds for a constructive dismissal claim against their employer.
• Extending working hours may cause an employer to be in breach of Working Time Regulations and depending on how an employee is paid, may even result in underpayment in breach of national minimum wage legislation.
• There is an implied duty of trust and confidence in the employment relationship. Even when an employer exercises a contractual right to make changes, it will be expected not to exercise that right in such a way as to make performance of the contract impossible or to breach the implied duty of trust and confidence. Forcing change through at short notice or demanding immediate mobility when the employee has care obligations would potentially breach the implied term.  This means consultation on change, even where allowed by the contract, is critical.
• If an employer resorts to the nuclear option of terminating the existing employment contracts and offering re-employment on new terms, this fire and re-hire practice is generally frowned upon (see our ‘Fire and rehire – what is it’ article) and requires significant thought before implementation, given the reputational, legal and cost implications of such action.

Commercial implications

Twitter’s employees have been talking to the media, mostly anonymously due to fears over losing their jobs or, for those who have left their jobs, over not receiving their severance pay. Prior to the Thursday deadline, some employees stated that they planned to reject the ultimatum and described their work environment as ‘toxic’. Other employees have criticised Elon Musk and said that his email made them feel forced to make a quick decision on something that affects their lives and families. Such comments clearly impact Twitter’s reputation both as an employer and an investment. Individuals may be deterred from applying to work for Twitter. Those employees who have chosen to stay are likely to be nervous about what is to come and staff morale is liable to remain low.

Elon Musk’s statement that “Only exceptional performance will constitute a passing grade” may inspire some, but may worry many who need to work but are afraid of what that statement means for their future performance reviews. Employers should plan early for all major change programme, whether in the public eye or not, including the communications to staff and how those communications will be received!

What is the objective of the transformation? Then deliver the communications to meet that objective.  In the case of Elon Musk, it seems that reputation management, employee engagement and long term loyalty may not be part of his plan, but he may have decided, a bit like P&O who went down the fire & hire route, that the risk of claims, burnout and short-term bad publicity, are a risk worth taking as part of a much bigger strategy.  We’ll have to wait and see!