Changing Terms of Employment

Can an employer change an employee’s terms of employment?

Yes, an employer can change an employee’s terms and conditions of employment, however, depending on the method selected, there are risks to the employer.

There are three generally accepted ways of changing employment terms;

  • Employee agreement
  • Dismissal and re-engagement and
  • Unilateral variation

 

Employee Agreement

Obtaining an employee’s agreement whether expressly or by implication is the best practice from a legal and practical perspective.

Although express agreements can be given verbally or in writing it is always recommended to gain a formalised written agreement.

An implied agreement may be where the employee does not expressly accept the change. The employee can be deemed to have consented to or accepted the change by continuing to work to the new or amended terms without complaint.

 

But what if the employee or employees will not agree to the changes the employer wants to implement? What can the employer do then?

 

Termination and Re-engagement

An employer may accomplish change by serving notice of termination of the employee’s current contract and re-engaging on a new or amended terms of employment.

The following of a fair process during this stage is essential as the employer is dismissing the employee. If a fair process is not followed this may trigger an unfair dismissal claim. This process may allow an employer to make more significant changes to the terms of employment but carries greater risk. Statutory collective consultations may be triggered where there are a larger number of employees involved (20+).

 

Unilateral Variation

This is where the employer, with or without consultation, informs the employees of the change and implements. This action can amount to a breach of contract where the employee could resign and claim constructive dismissal. It would also constitute a dismissal under case law for the purposes of statutory collective consultation.

 

What if you have a right to change terms of employment in the existing contract or employee handbook?

 

Be careful! Just because you have a term does not give the employer “carte blanche” to do what they like.  Such terms are not “bullet proof”.

Changing terms of employment can be complex. To ensure you follow best practice and protect your company from potential claims contact our HR team on 01527 571617 or hrsupport@agilityrac.com