Some matters can be changed without the agreement of the employee: examples include non-contractual policies where these have been carefully drafted and where they clearly state that there is no intention for them to be incorporated into the contract.
However, you should treat variations of the contractual terms cautiously as some changes may be considered to be a fundamental breach of contract that would permit an employee to resign and claim constructive unfair dismissal.
As an employer you can try to make it easier to vary certain factors by putting an express term into the contract which states that a particular term is variable. Whilst such clauses may encourage the employee to assume that the changes are permissible even an express clause will not guarantee that the employer can significantly vary a contractual term. There are three main options available should you wish to alter the terms of an existing employment contract. Agree the changes with the employee after consultation. A small incentive may be offered to encourage acceptance, and changes should then be implemented within reasonable timescales. This is the safest course of action. Make any changes unilaterally. Even if there is a pressing business need to impose the changes, this may be risky. The employee’s silence cannot be taken as acceptance if the term does not affect the employee at the time the contract was varied; otherwise, the employer may assume acceptance if the employee continues to work without objection. The employee may choose instead to continue to work, but do so under protest and bring an action for breach of contract. Where the employee believes the breach of contract is a fundamental breach, he or she may resign and bring a claim for constructive unfair dismissal and/or wrongful dismissal. Terminate the employee’s contract by notice and offer them re-engagement on new terms and conditions. An employer may consider this option where changes cannot be agreed and where it appears too risky to impose the changes unilaterally. The employer must then offer re-engagement on the new terms immediately. Employers should be aware that this may be considered in law to be a redundancy dismissal, therefore any rules around collective redundancy and consultation time limits should be observed. This course of action is not without risk: the employee may claim breach of contract. And even if the employee does not claim breach of contract, they might still be able to claim unfair dismissal, although any compensation will be limited as the employer is offering re-engagement.
Any variations should be confirmed in writing within one month of the changes taking place. Additional points to consider Changes following a transfer of undertakings can only be made for an economic, technical or organisational reason if connected to the transfer, not merely because of the transfer or to harmonise terms across the workforce. While there is no legal requirement for employees to sign their written statement, it makes it easier for an employer to rely on any subsequent clause if they have done so. In the absence of this, it is helpful to be able to rely on evidence that you as an employer brought them to the employee’s attention, and invited them to discuss any concerns with you. Employers using agency workers on a long term basis should be cautious as case law has found that such workers might be considered to be employees and such workers will soon receive further statutory protection. Where employers wish clauses to be non-contractual, they should state this clearly when inserting them to ensure they cannot be relied on as implied by custom and practice. Certain clauses such as mobility clauses or restrictive covenants need to be drawn up with particular care to ensure they can be relied on in the future. For the first five years of employment, employers may have different provisions for employees depending on their length of service. After that, under the Employment Equality (Age) Regulations 2006, the employer will need to prove that such provisions fulfil a business need, such as encouraging loyalty or motivation, or rewarding the experience of some or all of the workers.
RML members seeking to vary terms and conditions should seek advice.
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