The contract of employment sets out for both you and your employees the terms and conditions of employment, during the course of employment however you may need to vary the terms of employment and it is important that you do this correctly. It can seem very straight forward to vary terms however as the recent case of Gower and Donnelly v Post Office Limited (2017) demonstrated it is important that you follow a clear process to avoid problems and a possible tribunal case.
In this case the employer (Post Office) decided to change the payment terms for some employees from weekly to monthly, which is a common change made by businesses to save costs and administration time. In the case, (which was won by Gower and Donnelly) the post office communicated the changes and the employees objected, despite the objection the employer made the change and offered loans to employees to support the transition (which were accepted). During this time the employees continued to work and did not declare that they were ‘working under protest’. The employees brought a claim of unlawful deduction of wages and breach of contract which they successfully won.
The employer tried to defend the claim by arguing that they accepted the changes by continuing to work under the new payment terms as well as taking the loans offered. Despite this the Employment Tribunal found that they were entitled to be paid every Friday as they had always been paid and that for each Friday they were not paid it amounted to breech of contract.
So, what does this mean for you? Whenever you vary terms of contracts it is critical it is done properly and effectively with the correct documentation to ensure that, should a claim be made, you can demonstrate proper consultation, follow up and process. You must consult with the employees affected (and if there are over 20 affected with representatives) and during this consultation you need to ask the employees for their concerns and, where possible, addressed these. You must document this consultation process.
If the change is not agreed then you have 3 options, some of which carry a risk of unfair or constructive dismissal so it is important you do these properly:
- Abandon changes
- Force the changes on the grounds of business reasons
- Dismiss and Offer Re-Engagement (a last resort)
If the thought of ending up in tribunal is giving you a headache why not drop us a line and let us handle any contractual changes for you. Drop us a line at [email protected].