Changes at work are common. Businesses restructure, working patterns evolve, offices relocate and employers may need to respond to financial or operational pressures. But what happens when your employer wants to change something fundamental, such as your salary, hours, place of work or responsibilities?
In England and Wales, an employment contract is a legally binding agreement. As a general rule, an employer cannot simply change its terms whenever it wishes.
Understanding your rights can help you decide what to do if you are faced with a proposed contractual change.
Does an employer need your agreement?
Usually, yes.
Changes to contractual terms generally require agreement between the employer and employee. This applies whether the original terms were agreed in writing or verbally.
An employer considering a change should normally explain what it proposes, give the reasons for the change and consult affected employees or their representatives.
Common proposed changes include:
- salary or other contractual payments;
- working hours or shift patterns;
- job responsibilities;
- workplace location;
- contractual benefits; and
- holiday or other contractual entitlements.
The fact that an employer has a commercial reason for wanting a change does not automatically give it the right to impose that change.
What if your contract contains a flexibility clause?
Some employment contracts contain a flexibility or variation clause allowing an employer to change particular terms.
The existence of such a clause does not necessarily give the employer an unrestricted power to change your contract.
Government and ACAS guidance makes clear that flexibility clauses must be used reasonably. An employer should also consider matters such as consultation and reasonable notice.
For example, a mobility clause might permit an employer to change an employee’s place of work. Whether a particular relocation is reasonable may depend on the distance involved, transport options, the employee’s circumstances and the notice provided.
The wording of the contract is therefore important.
What happens if you agree to the change?
If you agree, the amended term can become part of your employment contract.
Where changes affect the main terms contained in an employee’s written statement of employment particulars, the employer must provide written notification of the change within one month.
It is sensible for both sides to ensure that any agreement is recorded clearly, including when the change takes effect and whether it is permanent or temporary.
Importantly, agreement does not always require a signature. In some circumstances, continuing to work under changed conditions without objecting may potentially be treated as acceptance.
This is one reason employees who disagree with a proposed change should obtain advice promptly rather than simply ignoring it.
What if you do not agree?
If agreement cannot be reached, the situation becomes more complicated.
An employer may decide to impose a change. Doing so without contractual authority or the employee’s agreement can amount to a breach of contract.
Depending on the circumstances, an employee may potentially continue working while making clear that they are working under protest. Other possibilities can include refusing to accept the new terms, bringing an appropriate legal claim or, in serious cases, resigning and considering a constructive dismissal claim.
These options carry different risks. In particular, resigning should not be treated as an automatic or straightforward solution. Constructive dismissal claims have specific legal requirements, and taking advice before resigning can be extremely important.
Can an employer dismiss you and offer a new contract?
In some circumstances, an employer that cannot secure agreement may consider terminating the existing contract and offering continued employment on new terms. This is commonly described as dismissal and re-engagement or “fire and rehire”.
This is not a risk-free shortcut.
Employers should explore alternatives and undertake genuine consultation. A statutory Code of Practice applies to dismissal and re-engagement, and employment tribunals can take compliance with the Code into account in relevant proceedings.
Depending on the facts, dismissing an employee for refusing new contractual terms can also lead to an unfair dismissal claim.
Additional collective consultation obligations may arise where an employer proposes to dismiss and re-engage larger numbers of employees.
Could a contract change be discriminatory?
Potentially.
Even where an employer has a genuine business reason for making changes, it must consider its obligations under discrimination law.
For example, a proposed change to hours or workplace location could have a particular impact on an employee because of disability or another protected characteristic. The precise legal position will depend on the facts.
Employers should therefore consider both contractual rights and equality obligations before implementing workplace changes.
What should you do if your employer proposes a change?
Start by checking your employment contract, staff handbook and any relevant policies or collective agreements.
Ask your employer to explain precisely what is changing, why the change is proposed, when it is intended to take effect and whether it is temporary or permanent.
If you object, it is often important to communicate that clearly. Remaining silent while continuing to work under the new arrangements may complicate the question of whether you have accepted them.
Most importantly, get advice early if the proposed change significantly affects your pay, hours, duties, benefits or place of work.
Speak to Penerley Solicitors
Contract changes can have significant financial and professional consequences. Whether you are an employee concerned about proposed new terms or an employer considering changes across your workforce, getting the process right at an early stage can help prevent a disagreement from becoming a costly dispute.
Penerley Solicitors can advise on employment contract variations, workplace disputes, dismissal and re-engagement, and the options available when proposed changes cannot be agreed.
If you are facing a change to an employment contract, contact Penerley Solicitors today to discuss your position and the practical next steps available to you.
This article provides general information about the law in England and Wales and does not constitute legal advice. The appropriate course of action will depend on the individual circumstances.
