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Can employers unilaterally change employment contracts?

Posted on February 13, 2015

13 February 2015:         The general position is that it takes the agreement of both parties (express or implied) to change a contractual term in an employment contract.

 

In Norman and others v National Audit Office this month the EAT considered whether a general flexibility clause could be relied upon to vary employee entitlements.

 

In Bateman and others v Asda Stores 2009, Asda had successfully relied upon a general right to amend pay terms which they did following extensive consultation with employees.

 

In Norman, the EAT did not allow the employer to impose the change unilaterally. The changes were not incorporated into the employment contracts because saying that contract terms were “subject to amendment” came “nowhere near” the standard of being clear and unambiguous and established nothing more than the potential for amendment. No mechanism for amendment was specified.

 

If employers want to reserve the right to change contractual terms of employment unilaterally, they should be careful. Employers should ideally a) reserve the express right to amend b) set out a mechanism and c) consult with staff before doing so. Unless the process is undertaken carefully, the Courts may look critically upon the negative changes imposed on unwary employees.

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