Changes to Your Contract of Employment
Frequently employers will attempt to alter your contract of employment without offering you a fair pay-rise or other benefits in return. This could include, for example:
- increasing hours;
- decreasing pay;
- increasing targets;
- changing commission structure; and
- taking powers out of your hands.
There are almost unlimited different ways for employers to change your employment contract unfairly, and it could be that you are entitled to resign and/or ask for a settlement agreement as a result. It is difficult to set out here exactly whether a specific step taken by your employer warrants asking for a settlement agreement – each case is different. It is normally also necessary for us to review the contract of employment document itself, and other contractual documents such as the company handbook.
TOP 3 TIPS
- Except in rare circumstances employers are not permitted to change your contract without your agreement
- If you continue to work after your contract changes you can be deemed to accept the change
- If you don’t accept the change either raise a grievance or resign
What to look out for…
If the contract of employment contains a clause stating that the employer is entitled to vary any of the terms of the contract itself, then such a clause may well be invalid because it is so ‘wide’ that it is in effect an unfair term.
If however, it contains a narrowly defined clause, such as the ability for the employer to change the location of your work, then it is likely that they are entitled to rely on such a clause.
By and large, basic salary is not something which the employer can decrease without very good reason. Or, more accurately, it is not something which they are legally entitled to do (but niceties such as legal rights and obligations often don’t bother employers, unfortunately).
Discretionary bonuses on the other hand, are examples of things which the employer can change with impunity. Commission schemes and bonus structures are often legally protected, whereas changing powers and duties can be difficult to prove or to show that it is so bad that a settlement agreement is the only solution.
Where your employer has tried to alter your bonus structure or commission scheme, if you can produce the statistics to show that you are in real terms being asked to take a pay cut, then you have the basis of a potential claim for constructive unfair dismissal.
Accept the changes -OR- work under protest
As with other form of constructive unfair dismissal, if you are deemed to have accepted a change in your employment contract at the time, then it is difficult to sue for it later on. And if its difficult to sue for something, why would your employer offer you a settlement agreement for it? Well, they probably wouldn’t. That’s why it’s important to get the legal position right when you are approaching a possible settlement agreement negotiation.
How do I put myself in the best position if my employer changes my contract?
The key is not to be seen to accept the change. There are two main ways of doing this – either resigning or carrying on under protest. The protest might take the form of a submitting a grievance. You can find examples of grievance letters in our documents section – you can copy these and adapt to your own situation. Or you might say you are willing to try the new system but only for a trial period and that you suspect that you will be worse off but you are willing to find out before taking further action.
Of course if it’s so bad that you feel you have to resign then do so, and do it relatively quickly. The longer you leave resigning after an event, the harder it is to later say that you resigned in response to it (as opposed to resigning for some other reason).