Changes to your employment contract

 

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Changes to the terms of your employment contract  

During your employment there will definitely come a time when your employer wants to change your terms and conditions of employment. This may be in order to;

  • Promote you
  • Update any changes to the law
  • Re-organise the business
  • Review terms and conditions and update them

You may also want to change the terms and conditions of your employment, for example to request flexible working, or if your health status has changed and you need reasonable adjustments or want to drop your hours. You and your employer are both parties to the employment contract. The terms of the contract can be changed if you both agree, and there is some form of payment for the change. Where a change is agreed, your employer must give you a revised statement of your employment particulars within a month after any change under section 4 of the Employment Rights Act 1996.

 

Your employer should not change any of these terms of your employment contract without your agreement. If your employer changes or attempts to impose a change of the terms of your contract without your agreement, this is called a “unilateral variation”.

You may have a claim in the employment tribunal if your employer changes the terms of your employment contract without your consent, or without paying you adequately for the changes. There are three ways in which an employer can carry out these changes as follows;

  1. Propose a change and leave it for you to object. If you don’t object then you are deemed to have accepted the change through acquiescence. This is sometimes sneaked in by re-issuing a section of an employment contract, updating the employment contract or re-issuing a section 1 statement of employment particulars.
  2. Serve notice of the termination of the existing contract and then immediately re-engage you on the new terms.
  3. Dismiss all relevant employees and then invite you to reapply for your jobs.

In order for you to effectively resist these changes, you need to have a basic understanding of employment contracts, what the law allows your employer to do, your rights and the options available to you.  You should always start by raising a grievance.

Your employer can reserve the right in the employment contract to make changes to terms and conditions of employment without getting your explicit consent. The law says that for this to happen, your employer must express the reserved right in clear language, in a way that does not breach the term of mutual trust and confidence or act so unreasonably, arbitrarily or capriciously as to breach that obligation. You would probably have seen an example in your own employment contract where it specifies your duties, but also states that your employer can ask you to carry out other reasonable duties in the future. This is the kind of term that allows your employer to amend the contract without paying you for the change or getting your agreement. It is a breach of the duty if your employer introduces fresh or changed terms without any notice, warning, or consultation.

Even though your employer can change a term of your contract if the employment contract specifically allows it, the courts have generally been quite reluctant to enforce such a term. In Wandsworth London Borough Council v D’Silva and Another [1997], the court said that employers need to use clear language in a contract to be able to unilaterally vary it. The courts may not uphold such a term where the result would be harsh and unreasonable. Here, the council wanted to change its Code of Practice on Staff Sickness and the employees objected. The Council argued that the Code was not part of the employment contract, and that in any event they had reserved the right to alter the terms and conditions of the contract.
Lord Woolf MR said, The general position is that contracts of employment can only be varied by agreement. However in the employment field an employer or for that matter an employee can reserve the ability to change a particular aspect of the contract unilaterally by notifying the other party as part of the contract that this is the situation. However, clear language is required to reserve to one party an unusual power of this sort. In addition the Court is unlikely to favour an interpretation which does more than enable a party to vary contractual provisions with which that party is required to comply. If therefore the provisions of the code which the Council were seeking to amend in this case were of a contractual nature, then they could well be capable of unilateral variation as the counsel contends. In relation to the provisions as to appeals the position would be likely to be different. To apply a power of unilateral variation to the rights which an employee is given under this part of the code could produce an unreasonable result and the courts in construing a contract of employment will seek to avoid such a result.”

In Bateman v Asda Stores [2010], the Employment Appeal Tribunal said that employers can reserve the right to vary employees’ contracts unilaterally as long as the term is clear and they do not exercise the power in such an unreasonable way that they breach the term of mutual trust and confidence when doing so. In this case, Asda wanted to move some members of staff onto a new, up to date pay structure. After an extensive consultation process, about 9,300 staff agreed to move onto the new structure voluntarily but about 8,700 refused. Asda relied on an express term in the staff handbook to impose the new regime on the employees.

About 700 employees lodged claims for unlawful deduction of wages under section 13 of the Employment Rights Act 1996. The employment tribunal said that although employers normally need consent to vary their employees’ contracts, they could reserve the right to unilaterally vary them as long as the language of the term was clear. Such a term did not give employers an unqualified right to introduce changes. And the term would be unenforceable if the employer had acted so unreasonably or arbitrarily that they ended up in breach of the implied term of mutual trust and confidence. For instance, if they introduced the change without any notice or warning.

ASDA was allowed to vary the contracts unilaterally as they had given their employees several months notice of the change, and they had not done anything to breach the term of mutual trust and confidence.

Discrimination

If the proposed changes impact disproportionately on you because of a protected characteristic you may also have a claim for indirect discrimination. In Meade-Hill and Another v British Council [1995] Mrs. Meade-Hill was promoted by the Council. The promotion included a variation in her contract with the addition of a mobility clause which required employees of certain grades to serve in any part of the country as required by the council. She would not have been able to move if she was asked because her husband earned more than she did and they had to stay near his work. Mrs. Meade-Hill said that the mobility clause was indirect sexual discrimination and the court agreed. The court said that an employee mobility clause in a contract must be justified, or it could be discriminatory against women.

How to complain about the unilateral change

Even if your employer has given notice of the changes, and has consulted with you, you need to object in writing as soon as possible. You do this through the grievance procedure. This is not the sort of situation where you try to resolve the matter informally. If you do nothing, you will be taken to have agreed to the change. The grievance will probably not stop your employer from imposing changes, but it is the beginning of your formal protest about the changes and puts your employer on notice that matters could escalate to the employment tribunal if not resolved.

The options available to you are to;

 

  • Accept the change
  • Resign and claim constructive dismissal – if the change is really significant and completely unacceptable to you, and you have two years’ service.
  • Sue for unfair dismissal under the old contract – if the change means that your old contract is completely removed, and replaced with a new inferior contract, you stay employed under the new contract (or leave) and sue for unfair dismissal under the old one (if you have two years’ service). This is the principal established in the case of Hogg v Dover College [1990]. Here, the Employment Appeal Tribunal (EAT) found that Mr Hogg, “…..was being told that his former contract was from that moment gone”. Dover College said there was no dismissal, only a variation, to which the EAT replied that; It seems to us quite elementary, that you can vary by consent terms of a contract, but you simply cannot hold a pistol to somebody’s head and say henceforth ‘you are to be employed on wholly different terms which are, in fact, less than 50% of your previous contract”. The Court said that Mr Hogg had actually been dismissed by the demotion, and that ….even if we were wrong about that, we would take the view that there was a constructive dismissal”.

 

  • Stand and sue – Remain employed, raise a grievance and sue for breach of contract (wrongful dismissal). This is a good idea if you don’t have two years’ service. In Alcan Extrusions v Yates [1996] The EAT said that the unilateral imposition of a continuous rolling shift pattern in place of the traditional shifts previously worked by employees in accordance with their contracts amounted to an express dismissal of those employees, who reserved their right to complain of unfair dismissal even though they worked under the new system. Wrongful imposition of contractual changes may amount to an express dismissal – rather than a repudiatory breach entitling the employee either to treat the contract as terminated and claim constructive dismissal or to waive the breach by continuing to work under the new terms – if the departure from the original contract is so substantial as to amount to the withdrawal of the whole contract. Another case is Rigby v Ferodo Limited [1987] where Ferodo Limited cut wages by 5% to stay afloat. The trade union agreed not to strike and Mr. Rigby, who worked as a lathe operator on £129 a week made it known that he did not accept the wage reduction. For him this was approximately £30 a week. He continued to work and after over a year, he made a claim for the shortfall. The Court said that it was a unilateral variation of the contract, which was a breach, and so Mr. Rigby was entitled to damages. The Court of Appeal and the House of Lords agreed It held that if an employer reduces wages without a worker’s consent, the worker may continue to work and claim the shortfall.
  • Refuse to work under the new terms You can choose to remain in the job and refuse to work under the new terms if you have control over the changes, for example where the changes are about your hours of work or job description, rather than how much you are paid. Note that if you do this you will quite possibly be dismissed. In Robinson v Tescom Corporation [2008], Mr. Robinson first agreed to stand and sue, but then he changed his mind, insisting on working on the old employment terms and was dismissed for failure to follow a reasonable management instruction. The EAT said that his dismissal was fair because he had agreed to work under the new terms and sue, he could not subsequently refuse to do so. This means that if you do not want to resign, you can either agree to the change and work under protest or refuse to work under the varied contract. If you combine any of the options above, you will prejudice your position.

 

 

 

Resources available

How to Write a Grievance That Gets You What You Want

How to Write a Grievance About Bullying and Harassment at Work

How to Write a Grievance About Changes to Your Employment Contract

How to Write a Grievance About the Behaviour of a Colleague, Manager or Supervisor

How to write a Grievance about discrimination at work

 

How to Write a Grievance About Unauthorised Deductions from Your Wages or Salary

 

ET1: Breach of Contract

ET1: Non-Payment of Holiday Pay on Termination

ET1: Non-Payment of Holiday Pay whilst still employed

DOCUMENTS, FORMS AND LETTER TEMPLATES

 

 

Best of the web

ACAS – Varying a contract of employment

GOV.UK – Changing an employment contract

 

Disclaimer

This resource is published by Employee Rescue Limited. Please note that the information and any commentary on the law contained herein is provided for information purposes only. The information and commentary does not, and is not intended to, amount to legal advice. Employee Rescue accepts no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material contained in this publication.

Further specialist advice should be taken before relying on the contents of this publication. You can send an e-mail to thelawyers@employeerescue.co.uk for such specialist advice if required.

 

 

 

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