Imposing a Contractual Change
9 November 2016
Certain changes to an employee’s terms and conditions of employment may be expressly authorised by their contract. Where this is the case, there could be scope for the employer to make the change without the need for consent. However, if the proposed change is not covered by a clause of this nature and the employee does not agree to the change, things are not quite as straightforward.
Many contracts of employment contain a general flexibility clause. Such clauses purport to give the employer the general right to make changes to any term of the contract. Whilst a clause of this nature can be exercised under certain circumstances, case law has shown that employers are highly unlikely to be able to rely on it when the change is to the detriment of the employee – such as the withdrawal of a contractual benefit.
In the event that an employer imposes a change that is to the detriment of an employee, that employee will be in a strong position. One of the options open to them is working ‘under protest’, which will retain their employment whilst allowing them to pursue a claim for breach of contract or, if relevant, unlawful deduction from wages. In the event that the change amounts to a repudiatory breach of contract, the employee may even be able to resign and bring a claim for constructive unfair dismissal. As an employer, this is certainly something you will want to avoid… unless the idea of open-wallet surgery appeals to you.
To avoid these risks, it is therefore generally advisable to seek the agreement of employees prior to imposing a change which may subject them to detriment. This will essentially take the form of a selling exercise in order to get the employees on-board with what you are trying to achieve. This may involve an incentive to secure their agreement or it could simply require you to explain to them the possible alternatives the company may have to consider if the change is not agreed. It is important to engage with employees and take note of any suggestions they may have. After all, they may come up with a solution you had not previously considered!
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