Can Employers change contract terms?

03 April 2020

Changes to Workers

If you are an employer – you might wish to change how your workforce deliver for you. If you work for someone, they might wish to change how you do that.
Changes to how someone works inevitably means a change to the employment/work contract. i.e. a "variation", regardless whether it is in writing or established verbally.

Businesses in the leisure, travel and other areas are currently considering how to reduce their wage bills as government and common sense health measures relating to the coronavirus pandemic impact on our lives.

Changes an Employer might make

UK employers may be able to take advantage of contractual lay-off and short-time working provisions, but it makes sense to receive specific legal advice before seeking to make changes to employee terms and conditions. (Lay-off is when an employer takes an employee off work and off pay for at least one working day. It is used as a response to lack of work and is an alternative to making redundancies).

Short-time working is like lay-off, but rather than providing no work, the employer provides some work, albeit reduced. There are thresholds which can trigger the statutory short time working protections for employees, subject to eligibility requirements.
There is a statutory scheme for lay-off and short-time working, but please be aware that a lay-off clause in the employment contract is required in order to implement this.

The following may well be other changes which employers are currently seeking to implement:

pay cuts
changing hours of work
place of work
entitlement to sick leave
fringe benefits or perks
contractual maternity rights
contractual redundancy rights

The main two are probably the following.

Pay cuts
There are several ways pay could be cut, for example:
cutting the basic rate of pay
reducing rates of bonus or overtime
reducing any extra holiday paid on top of any statutory entitlement
reducing sick pay paid on top of the entitlement

Changing hours of work
Employers or workers may seek to change work hours by:
cutting hours to save costs 
increasing the hours a worker might perform
changing the hours worked without changing the total number of hours

Without a clear contractual right to suspend in these circumstances, there is no easy way to suspend an employee. Imposing suspension without agreement may give rise to claims against the employer. Therefore, agreement should be obtained. 
Asking employees to stay at home for a temporary period on reduced pay would certainly be a contractual change. To be lawful it must be permitted under the employment contract, and a proper process followed. 

The importance of Variation clauses

Some contracts of employment contain a variation clause that can allow your employer to make changes to your contract. 
Employers should only use these clauses to vary a contract if they have a good reason, for example and as discussed above, the business is struggling financially and needs to cut staff hours.
Your employer should follow a fair procedure if they want to use a variation clause to make a change to your contract.

If workers do not agree to a change

If a worker is unhappy about a change to a contract and doesn't want to accept it, there are steps to follow. A worker should confirm communications with an employer in writing and keep a copy.

Working ‘under protest’
Workers should make it clear that they are working ‘under protest’ until the issue has been discussed and sorted. This tactic stresses that the change has not been accepted by the individual but also shows willing to try and sort things out.
Individuals should really do this as soon as the change has become known. Failure to do this may be perceived as an acceptance of the change.

Refusing to accept the change
If a worker doesn’t accept the change, this should be made clear. Furthermore, the individual should mention any lack of notice or consultation. He or she might also ask why the change is being implemented and not be shy to make own suggestions. If the individual needs to or wants to carry on working, stress that this is under protest until agreed. 

End game
Workers cannot go on working under protest for ever – sooner or later, it would be reasonable to assume that the change has been accepted. Individuals could consider making a claim to an industrial tribunal or taking action in the County Court for breach of contract.
Before deciding whether to resign, workers should take appropriate advice and weigh up a loss of employment against changed employment (regardless of any claim going through). Changes not agreed which materially breach individuals’ contracts may well lead to claims for constructive dismissal.

Occasionally, changes may be discriminatory, e.g. those made concerning persons with disabilities which result in problems. 

Modern Times
Agreement from workers should be obtained to cope with the extreme circumstances currently faced which may well help in reducing the risk of legal claims. Transparency by employers in this situation would be welcome and collaboration with the workforce would help a very difficult situation. 

John Davies
24th March 2020

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