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contract terms employment law

Can an employer vary an employment contract without an employee’s consent?

According to the Employment Appeal Tribunal in Bateman -v- Asda Stores Limited the answer is a qualified yes.

Asda wanted to ensure that all their staff were employed on the same pay and work structure. As a result it was necessary for employees working under an old regime to transfer to new arrangements. Approximately 9,330 employees agreed but the remainder did not. As a result, six employees (as representatives of those 700 or so who did not agree to the changes) brought claims for unauthorised deductions from pay contrary to section 13 of the Employment Rights Act 1996.

Asda had taken the precaution of including the following in its Colleague Handbook:

Changes to the Colleague Handbook
[C] The Company reserves the right to review, revise, amend or replace the content of this handbook, and introduce new policies from time to time to reflect the changing needs of the business and to comply with new legislation. A copy of the handbook is displayed on the colleague communication board in your store and on Pipeline, and replacement copies are available from your People Manager.

The Handbook also included details of the old and new pay structures. The tribunal took the view that the relevant clauses in the Colleague Handbook permitted Asda to impose unilateral changes on employees, even where they involved reductions in pay and benefits. The Employment Appeal Tribunal agreed. However, it should be noted that there was also a warning that an employer who attempts to use such a right unreasonably, arbitrarily or capriciously, or without any or any adequate consultation, will be likely to have acted in breach of the duty of trust and confidence which is implied into all contracts of employment so that could in itself lead to a fundamental breach of contract entitling an employee to claim constructive unfair dismissal.

Our advice is that any employer seeking to impose a unilateral change in terms of employment should proceed with considerable caution. Yes, it can be done, but the chances of getting things wrong by failing to follow a clear and fair procedure are high. As ever, it follows that anyone contemplating such action should contact us before the process commences.