The legal position
A contract of employment is no different to any other type of contract. It cannot be varied unless both parties expressly agree to the variation or impliedly agree. It is this second area that often causes difficulties.
What should an employer do?
If an employer needs to vary the terms and conditions of employment of employees then they should sit down and discuss the matter with the employees. They should explain the reason behind the variation to the employees and try to seek some form of agreement to the variation. If a variation is agreed then this should be so recorded in writing and the contract of employment and/or the staff handbook should be amended to reflect the change. If the employer issues new contracts of employment then these should be signed by the parties and a record should be kept to ensure that all employee have signed and returned their new contracts.
What is agreement cannot be reached?
If agreement cannot be reached then the employer needs to make a decision as to whether to proceed with the proposed amendments or not. If they decide to proceed then they can give notice to terminate the old contract of employment and offer to re-employ the employee on the new terms and conditions. This is not without its risks because the employee can dig their heels in and can even take the employer to a tribunal.
If the employee decides to remain with the employer then the employer needs to make the employee aware that it is a condition of them remaining with the employer that the employee accepts the new terms and conditions. The employee can make it clear that they do not however accept the terms. In this case, clearly things cannot continue indefinitely. One side will have to bring the contract of employment to an end or accept that the variation to the contractual terms will remain in place.
What are the risks for employers?
If the variation has an immediate impact upon the employee such as a change of hours or a reduction in pay then things will be more straightforward. The employee will have to quickly decide whether or not to accept the new conditions. He will be paid less or have to work different hours immediately and will have little if any control over this. Therefore, he will either have to accept the change or work under protest. However, if the employee continues to work under the new terms and conditions, he will, after a certain period of time, be deemed to have accepted these new terms. This is agreement by implication as the employee has worked subject to the new terms and conditions and will therefore be deemed to have accepted the terms.
What if the change to the terms and conditions has no immediate effect?
If the change to the terms and conditions has no immediate effect then the position is slightly more complicated. For example, if an employer wishes to change a redundancy process that is part of the terms and conditions or wants to add a restrictive covenant then there is no immediate effect upon the employee.
In the case of Selectron Scotland Limited v Roper it was decided that, if there was no immediate impact upon the employee, as a result of the change, then the employee may not have accepted the contractual change.
However, in the case of Wass v Science Museum Group, an employee was deemed to have accepted a change to her terms and conditions by implication when she continued to work under the new terms and conditions for a number of years despite the fact that she had not accepted the change at the time that it was made.
Summary for employers
- When considering changes to terms and conditions consult with staff, explain the reasons for the changes and try to seek agreement.
- Record any changes made in writing and update employee documentation and records.
- If agreement cannot be reached make it clear to employees that their continuing employment is conditional upon them accepting the said changes.
- Always act reasonably as an employer. The first thing that most tribunals will look at in any case is how reasonable was the employer.
This blog represent the view of the author and should not be taken as specific legal advice in relation to any employment situation. If in doubt always seek legal advice.
We offer a wide range of employment services to companies including a specific HR system for all sizes of companies. For more information see our website www.chilternsolicitors.co.uk or email us at info@chilternsolicitors.co.uk. Please feel free to call us on 01582 439795.
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