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MILS HR CASE STUDY – VARIATION OF TERMS AND CONDITIIONS OF EMPLOYMENTBack

HR“I have an employee who works 4 days a week in the Bodyshop, however work has increased and I now need him to work 5 days a week, can I change his contractual hours/days?”

As there has been an increase in the workload and you require the employee to increase their working week, it would be treated as a variation of terms and conditions of employment.

The procedure to follow would commence with a meeting with the employee whereby you set out the company’s proposal and business reasons supporting that proposal. Explain how it has come about and why it is needed. The employee has the opportunity to discuss the same and ask any questions to instigate further discussions on the proposal. It needs to be put as a “proposal” rather than as a “decision” at this stage.

Following the meeting, a letter should be sent to the employee setting out the proposal and a summary of the discussions, inviting the employee to accept the variation proposed after the consultation meeting. The employee could sign a duplicate copy of the letter which would be treated as a side letter and placed with their contract of employment to show a record of the variation. If however the employee is not happy to accept the change then a further meeting should be arranged to discuss the proposal in more detail. Ultimately in this situation, in order for the change to be valid, you will need the employee’s consent.

If after consultation has been exhausted there is still no acceptance to the change then there are a few options to consider:

Reconsider the proposal

Seek to vary it to find something that suits both parties.

Consider a unilateral change

This is where an employee is not willing to accept a proposed change but you impose it on them anyway after giving reasonable notice. If the employee continues to work under the new terms and conditions without making their objections known, then after a period of time (usually months rather than weeks) they could be deemed to have impliedly accepted the change. It would then ordinarily be incorporated into their contract of employment. Alternatively the employee could continue to work under the new terms and conditions under protest (meaning they would have given some form of objection) then there is no acceptance by the employee and the risk would be a breach of contract claim. There is also the risk that the employee could resign as a result of the breach and claim constructive dismissal before an Employment Tribunal if they have over two years’ continuous service. A constructive dismissal claim operates in the same way as if you had expressly dismissed the employee for objecting to a change to the contract of employment.

Consider a dismissal and re-engagement

This means you are serving notice to terminate the employee’s current contract (in accordance with their contractual notice or statutory notice period, whichever is greater) and offering to re-engage them on the new terms and conditions of employment. The re-engagement should start immediately on termination of the previous terms and conditions to preserve continuity of service.

This course of action is still risky in case employees have been employed by you for more than two years as they can then claim an ordinary unfair dismissal claim. However it would remove the breach of contract element as the original contract has been terminated. Provided you carry out a fair consultation and give notice of the dismissal, you should be able to put forward a reasonable defence to such a claim and demonstrate you have acted reasonably in the procedure you have adopted to effect the dismissal and re-engagement.

In either situation it would still be recommended to offer a right of appeal against the decision.

Don’t forget to carefully document all meetings in the minutes/notes at the time. If you are subsequently defending a Tribunal claim you will need to demonstrate you have followed the above process by a careful paper trail which should be evidenced by notes from meetings and letters and/or emails.

Andrew Macmillan
Solicitor
Motor Industry Legal Services

Posted by Sue Robinson on 30/01/2015