Changing terms and conditions of employment
In the ever-changing world of work, an employment contract signed some years ago may now resemble a piece of antique furniture. Indeed, over the course of an employment relationship, developments like statutory initiatives and reorganisations are likely to demand a change in terms and conditions that were previously fine. When this happens, it is vital that you find the governing terms and conditions and make sure that you are fully aware of what they mean before you make any changes.
Where
can I find the terms and conditions?
Terms and conditions of employment are not always only contained in a written contract of employment.
Often a company will have a staff handbook which may contain contractual terms and conditions. And other sources include the initial offer letter. While this document is often a brief summary, it can be used as a starting point. Custom and practice within a particular industry may also imply terms which 'fill out' the offer letter as may verbal and collective agreements.
How
can I vary the terms and conditions?
Once the terms and conditions are located you can then give consideration to variation (changing them).
There
are three main routes to do this:
Variation
by agreement
Primarily, it is important to consider whether the variation requires agreement. A non-contractual benefit may be modified or withdrawn at any time. Certain changes can be said to fall within managerial prerogative (such as methods of working).
If it is a term such as duties or pay, then consensual variation must be informed and given freely.
Problems arise when the employee believes the change is detrimental. If there is a threat of dismissal or other form of duress by an employer then the variation will not have been given freely and will not be binding.
Implied agreement should not be presumed and silence does not amount to consent to a variation, but a small bonus or salary increase can often ease matters along and act as consideration for the variation.
Contractual
right to vary
This is where the term is drafted widely enough to be construed that it covers the proposed change (ie, mobility clauses)
When this is done, you need to be aware that an express term in the contract of employment, which provides the right to vary a contract, can be limited by the implied term of preserving trust and confidence.Therefore, even where there is an apparent right to vary, reasonable notice should be given to the employee together with adequate consultation.
Forced
variation, termination and re-engagement
Often an employer needs to introduce changes to terms and conditions because of pressing business needs. Where there is no consent and it is imperative to push through the change, an employer may either impose new terms as a fait accompli or terminate the contract and re-engage on new terms and conditions.
What
if I vary consent, misuse a variation clause or dismiss and re-engage?
When you decide to change terms and conditions you need to be aware that it can have an adverse impact. For instance:
Summary
When you are looking to change terms ands conditions it is best to seek express consent at all stages (even where there is a contractual right to vary), as getting the employee on side will make it much easier to avoid any potential claims in the future.
Unilateral variations should only be seen as a last resort when all other avenues of action have been exhausted.
Finally, remember to ensure that the employee signs a letter/document confirming acceptance of any variation.
David Gibson is a solicitor at law firm Dickinson Dees. For further information contact him at David.Gibson@dickinson-dees.com ( www.dickinson-dees.com)