Unilateral variations to contract
March 2008
In this article...
The background
This case concerns the options available to parties where an employer wishes to unilaterally vary an employee’s terms and conditions of employment, and how an employee might respond.Under most contracts of employment, employers do not have the power to make changes to employee’s terms and conditions of employment without the employee’s consent.
Even where an explicit variation clause exists, employers must effectively ensure that they act reasonably in exercising any such clause.
There are a number of ways in which an employee may respond to an employer’s attempt to vary their contract of employment and the extent of these options was set out by the Employment Appeal Tribunal (“the EAT”) in Robinson v Tescom Corporation.
The facts
Mr Robinson was employed as a territorial sales manager with responsibility for the South East of England. The company wished to reorganise Mr Robinson’s duties and require him to cover a larger territory.Mr Robinson made it clear he did not accept the new role and job description. He raised a grievance, objecting to the changes, and was offered a 12 month trial period. Further meetings failed to resolve matters. Mr Robinson continued to object to the changes and said he would work under the new job description but “under protest”.
The company sent Mr Robinson a new job description for signature, with a start date. He wrote back refusing to work to the new job description, despite his earlier letter stating he would do so but under protest. Mr Robinson stuck to his guns and carried on performing his old job. The company treated this as a failure to follow a reasonable management instruction and summarily dismissed him. Mr Robinson brought a claim for unfair dismissal.
The decision
The EAT found that the decision to dismiss was fair. It found that Mr Robinson had agreed to work to the new job description, albeit under protest and he had gone back on that agreement.The EAT set out that there are four ways in which an employee can respond to an employer’s unilateral change to their terms and conditions.
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1. Accept the changes. Mr Robinson had made it clear that he did not accept the changes, but the EAT found that he agreed to work for a trial period under protest. His subsequent refusal to do this justified his dismissal. | |
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2. Resign and claim constructive unfair dismissal. This option would have been open to Mr Robinson, but by telling his employer that he would work “under protest” under the new job description, Mr Robinson had agreed to work to the amended job description while attempting to resolve the outstanding issues with his employer. | |
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3. Refuse to work to the new contract and require the employer to take the steps it thinks appropriate. Mr Robinson did not go down this route as he agreed to work to the new job description. If he had, the company could have considered dismissing and re-engaging Mr Robinson on new terms and conditions. | |
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4. Work under protest and seek damages for breach of contract or, where the breach of contract is sufficiently serious, bring a claim for unfair dismissal on the basis that the unilateral changes had effectively brought the original contract to an end. This is the approach that Mr Robinson appeared to be going for but diverted from by firstly agreeing, and then refusing, to work under the new job description. This gave his employer a fair reason to dismiss him on the basis of misconduct. |
What does this means for me?
This case confirms that employees must respond consistently to a unilateral change to their employment contract. It is not possible for employees to “dodge between” options 3 and 4 above.It is, however, important to remember that:
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employees’ agreement should be sought in relation to contractual variations; | |
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employers generally have no right to simply change terms and conditions on notice; | |
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even in the rare cases where there is an express contractual right to change terms and conditions, employers must maintain employees' trust and confidence in exercising that right; but | |
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where an employee agrees to work under protest and then reneges on that agreement and insists on working under their original contract, then any subsequent dismissal is likely to be fair. |
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