How easy is it to vary a contract of employment ?
The employer should first be clear as to what the existing contract states, does it include any flexibility provisions and/or a general right to vary it on the employer’s part. The employer should however be wary in any event as problems can still arise even if the contract has very favourable flexibility clauses in the employer’s favour and :-
- ambiguity relating to the terms of the contract will almost certainly go against the employer.
- flexibility clauses tend to be narrowly interpreted
- the more important the change, the more a court is likely to stroke down or water down even an express clause. Big changes might be fundamental changes to job role or being asked to relocate to a place a long way away.
In the absence of an express contractual right, an employer needs to tread very carefully and adopt a consultative approach. Below are some options, some of which are very risky, others not so :-
- Seek express agreement from the employee to the new terms.
- Attempt to unilaterally change the employment terms and hope that the employee will acquiesce and effectively “waive” the breach of contract.
- Terminate the current employment contract and then offer new employment on different terms.
What can an employee do if employment terms are changed but without consent ?
If an employer acts as above, this will constitute a breach of the employment contract. Employment contracts are no different to any other contract in the sense that there are different classifications of terms. Some terms in any contract will be fundamental terms i.e those terms which are obviously the most important (in the case of an employment contract clearly issues such as the job role, place of work and pay) and other terms which are less important. Whether a party in breach has committed a fundamental breach is highly significant as this impacts on the remedies available to the innocent party, in this case the employee. The general options, regardless of the type of breach (although it is important for the reasons stated above) are :-
- To comply with the changed terms of employment but expressly under protest and claim breach of contract.
- If the breach of contract is clearly a fundamental breach, the employee then has the right to resign claiming constructive unfair dismissal.
- Refuse to change terms, continue to stick to the current terms and see what the employer will then do about the situation. If it is not clear whether the breach of contract by the employer would be a fundamental breach, this is a safer although very awkward in practical terms option., The employer may dismiss but would then need to justify the dismissal and will almost certainly face a claim for unfair dismissal.
Thanks to Ben Jones of Darlingtons Solicitors for this very useful contribution. Ben specialises in employment law and commercial law. Darlingtons can be contacted on 0208 951 6666.