On occasion, business needs may dictate a need for alterations to an employee’s contract of employment. Perhaps some of the practices included are old and outdated, therefore needing to be brought up to date, or else perhaps employee allowances are too generous and need to be cut back for the benefit of the business’ future.
However, changing an employees’ contract of employment or those of multiple employees can be risky business for employers. It is important to remember that an existing contract of employment can be varied only with the agreement of both parties and under law, any agreed change must be communicated in writing within one month of the change taking effect.
But how do you enforce the changes? Here are a few pointers to consider:
Employees can accept the changes by writing or verbally. However, in order for the change to be binding, they must receive something in return. Continuing employment may be sufficient, although if the change does not take immediate effect, issues could arise in the future.
If the employee does not accept the contractual change, the employer must decide whether to enforce it anyway, and rely upon the employee’s implied acceptance, or dismiss the employee and re-engage on the new terms.
Implied acceptance is typically relied upon if the changes take immediate effect, for example, a pay cut. However, employers should not assume that an employee’s silence represents acceptance, and imposing the change will put the employer in breach of contract. An employee subject to an enforced contractual change can continue to work, but “under protest” and then issue a claim for breach of contract, or in the case of a wage cut, unlawful deduction from wages.
Alternatively, disgruntled employees may resign citing constructive unfair and/or wrongful dismissal (if the contractual change is significant), or simply refuse to work under the new terms.
If the employer chooses to dismiss employees and then re-engage, it will avoid the uncertainty involved in relying upon employee acceptance. However it does open the door to claims for unfair dismissal and wrongful dismissal.
The first step when looking to alter the terms of a contract of employment is to consult with your employees (or their representatives) about the proposed changes.
It is important to remember that making changes to contracts of employment that appear to be detrimental to employees’ entitlements is likely to affect the employees’ level of engagement, morale and performance. So being as honest and open with employees as possible, ensuring they are kept informed at all times, is the best approach to take.
Farleys’ employment solicitors can provide advisory clinics on site at an employer’s organisation for the purposes of providing independent Employment law/HR advice to employees when making variations to contracts of employment.
This service has proved efficient and effective for both employers keen to prevent disruption to business and for the accessibility and convenience to employees, who may find such matters unsettling.
Our on site advisory clinic services can be tailored to suit any business and can be provided with flexible costs; within and outside of standard working hours and both on and off employer sites.
For more information, please contact our team of employment law solicitors today on 0845 050 1958 or email us.
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