Can my employer change my contract of employment?
A contract of employment is a legal agreement between the employer and the employee. Its terms cannot lawfully be changed by the employer without agreement from the employee (either individually or collectively through a recognised trade union).
Where a trade union is recognised, negotiations to change contract terms should be through collective bargaining.
Your employer owes an implied contractual duty to explain clearly the effect of any change, for example a change to wages or working hours.
Depending on the extent and likely impact of the proposed changes, your employer should meet with affected employees, or the union where one is recognised, and explain their case for making the proposed change. Employees should be given time to consider the proposal as well as to suggest alternative ways of achieving the same result (for example if cost-saving is the aim, different cost-saving ideas).
Where the change involves removing a benefit, an employment tribunal is more likely to think your employer has acted fairly if it has offered something in return for the change, such as financial compensation, and given enough advance notice before the change takes effect so that employees can plan ahead.
Your employer must not breach equality laws when changing contract terms. Consulting in advance can help your employer map out who is most likely to be negatively affected by the planned change and take steps to reduce this negative effect.
An employee can decide to accept a change, and many terms of the contract are, of course, varied from time to time by mutual consent, for example a pay increase.
Your employer must behave reasonably when making changes to your contract terms and must not leave an employee unable to perform the contract – for example, by requiring an employee to relocate at extremely short notice with no payment of expenses.
The way your employer implements any contract change must not breach their duty not to destroy mutual trust and confidence, or the implied duty of good faith.
Where changes are made to your contract, employers must give you written notification of the change within four weeks.
An unauthorised, one-sided variation is likely to be a breach of the contract of employment, and the fact that the employer has given you notice of the change will not make it lawful. However, if you put up with the change without protesting, there is a good chance that you will be viewed as having implicitly accepted the change, losing your right to object to it. In practice, if the employee does not agree to the change the employer may give notice to terminate the contract of employment and re-engage them on the new terms. This is known as “fire and rehire”. Terminating the contract lawfully with notice means there is no breach of contract, and the employee’s remedy would be for unfair dismissal. Note that the dismissal will not necessarily be unfair, though, since an employer can rely on “some other substantial reason”, which is a fair reason for dismissal.
If you continue to work under protest, you must clearly register your opposition to the change and pursue a claim in the employment tribunal quickly, after taking proper legal advice. If the change results in a loss of pay, you may have a claim for unlawful deduction of wages.
In practice, a collective approach to this sort of dispute is often best, either via a group tribunal claim supported by your trade union, through protest and threatened industrial action, or by a combination of different approaches.
Sometimes, a change is so fundamental that it goes to the heart of the contract. A resignation in response to this kind of change could be a 'constructive dismissal'. However, resigning is clearly a very high-risk option, and usually only advisable when you already have another job to go to.