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Operators that fail to agree changes with employees are risking a costly tribunal judgment
Words: Steven Meyerhoff In the cut and thrust of daily business life, it should not be forgotten that changes to terms and conditions must be agreed with employees – simply assuming they have accepted a change can land employers in trouble.
A recent case is a good example of this.
A major company took on a storekeeper to work in its warehouse. He signed a statement of terms and conditions, and conirmed receipt of the company handbook. Neither the statement nor the handbook mentioned provision for payment during lay-off. Three years later, the storekeeper was issued with a new handbook, which stated that, together with the contract of employment, it set out the main terms and conditions of employment. The new handbook included a provision providing for lay-off without pay other than the statutory guarantee payment, which was not mentioned. The company alleged that employees had also been issued with new contracts of employment, but no copy was produced. The storekeeper brought a claim for unauthorised deductions from wages for a period of nearly three months during 2009.
Decision
The employment tribunal decided that the employee was bound by the new handbook and the company had the contractual right to lay him off without full pay. His unauthorised deductions claim failed. He then appealed to the Employment Appeal Tribunal (EAT), which overturned the decision of the employment tribunal.
The EAT held that there was no agreed variation of the contract of employment. Further, the employee could not be deemed to have accepted the new lay-off term. It was not drawn to his attention, but it did not affect him until he was laid off in 2009, at which point he promptly raised a grievance. This proved that he did not accept the lay-off variation.
Acceptance can only be shown by an employee continuing to work in a way that demonstrates they have accepted the new terms.
The EAT found that the company had made unauthorised deductions in respect of his normal pay (less the statutory payments received for the period of lay-off) and that these must now be paid.
Implications
This case demonstrates the importance of getting explicit employee agreement to changes of terms and conditions, rather than relying on deemed acceptance. Employees should be asked to sign and return a copy of new contractual terms to conirm that they agree to be bound by them.
The imposition of a change by the employer (rather than by agreement or by the termination of existing contracts and re-engagement) means that the employee has an ongoing claim for breach of contract and the employer may be forced to reverse the change. The main issue will be whether the employee can be said to have accepted the change by implication because they have continued working.
This case shows that it is dificult for the employer to show deemed acceptance of the new terms where the
change doesn’t affect the employee until a later date. This would also apply where, for example, an employer attempts to change contractual maternity or redundancy beneits. As the change may not affect employees until a later stage, the mere fact that the employee does not explicitly object may not be suficient to show acceptance, although it will help the employer if the proposed change has been brought clearly to the attention of the employees. Ensure changes are accepted and agreed by employees with clear, written conirmation. Where a collective agreement exists, consult the union – that way you will protect your business. ■ ● Steven Meyerhoff is a director and head of commercial litigation and employment at Backhouse Jones Solicitors. steven.meyerhoff@ backhouses.co.uk