Employment contracts: Can your employer change yours?

There is an almost unlimited number of different ways for employers to change your employment contract unfairly.

As a result, you may be entitled to resign and claim constructive dismissal and/or to ask for an exit settlement agreement.

See also our related guides on contracts of employment, breaches of employment contract, and Contracts for senior executives. Other relevant guides are listed throughout and at the end.

Has your employer changed your contract?

Sometimes 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 your hours
• Decreasing your pay
• Increasing your targets
• Changing your commission structure
• Taking powers out of your hands

It is difficult to determine exactly whether a specific step taken by your employer warrants asking for a settlement agreement – each case is different.

It’s necessary to review the contract of employment document itself, together with other contractual documents such as the company handbook and also to consider the broader context.

What changes to your contract can an employer make?

Your employer is legally entitled to make some changes to your contract of employment without your specific agreement.

Your contract of employment may contain one or more ‘flexibility’ clauses, which allow for ‘reasonable’ changes to your contract to be made by your employer in some circumstances.

However, a clause stating that the employer is entitled to vary any of the terms of the contract may well be invalid. That’s because it is so ‘wide’ that it is unreasonable and in effect an unfair term.

If on the other hand, it contains a narrowly defined clause, such as the ability for the employer to change the location of your work, then – providing that due notice is given and the relocation requirements are reasonable – it is likely that they are legally entitled to rely on such a clause.

Can your employer change your basic salary?

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. 

Can bonuses be changed by your employer?

Discretionary bonuses can be changed with impunity but contractual commission schemes and contractual bonus structures are normally legally protected.

Where your employer has tried to alter your bonus structure or commission scheme, if you can produce the statistics/evidence 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.

What about changes to your responsibilities?

The situation is less clear cut where the change relates to changing your responsibilities. Whatever change your employer may wish to make, they can’t legally implement it without your agreement.  Or if they do go ahead and implement it without your agreement, then you must speak up, otherwise, you’ll be deemed to have accepted the change (see below).

What to do about a change of contract that you didn’t agree?

The key is not to be seen to accept the change, by only carrying on working under protest.  The steps you can take to register your protest and to try to get your employer to back down include:

• Flag the matter up informally at first, but if this doesn’t work you may decide you want to leave.
• If you want to leave, send a without prejudice letter setting out how much you are asking for as an exit package. (See below for help with writing such a letter.) If a without prejudice letter like this doesn’t work, then your next protest step might be to:
• Submit a grievance, and then proceeding to the next steps which include a subject access request and finally
• Submit an employment tribunal claim.

Should you agree to try out the proposed change?

Alternatively, you might say that you are willing to try the new system but only for a trial period and (if it isn’t a financial pay reduction) that you suspect that you will be worse off, but you are willing to give it a go before taking further action.

Next Steps

Get advice on your settlement agreement

If you manage to negotiate a settlement agreement that you are happy with, Monaco Solicitors can help you with advice on its contents and by signing it off (a legal requirement for concluding settlement agreements).  This won’t cost you a penny, because your employer pays the cost.

Get expert legal representation to progress your claim

However, if your employer won’t move in negotiations and you have a good case, our specialists in breaches of employment contracts may be able to help you.

Whilst our goal is always to try to settle in the first instance without going to court, we appreciate that it may take an employment tribunal claim to produce results.  We can help with both.

We may be able to offer you a free consultation, so get in touch to find out more:

• via this link
• phone 020 7717 5259
• email communications@monacosolicitors.co.uk