Breach of employment contract: Can your employer change your contract?

Has your employer changed or breached 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

 

There is an almost unlimited number of different ways for employers to change your employment contract unfairly, and it could be that you are entitled to resign and/or ask for an exit settlement agreement as a result.

It is difficult to determine exactly whether a specific step taken by your employer warrants asking for a settlement – 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 consider the broader context too.

 

Top Tips

Dippalli Naik
  • 1
    Except in rare circumstances, employers are not permitted to change your contract without your prior agreement
  • 2
    If you continue to work too long after your contract changes, you can be deemed to have accepted the change
  • 3
    If you don’t accept the change, put it in writing

What changes to your contract can an employer make?

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 (although niceties such as legal rights and obligations don’t always bother some employers, unfortunately).

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.

The situation is less clear cut where the change relates to changing your responsibilities.

 

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. Flag the matter up informally at first, but if this doesn’t work you may decide to leave. In that case send a without prejudice letter setting out how much you are asking for as an exit package. (See Next Steps below for help with writing such a letter.)

If a without prejudice letter like this doesn’t work, then your  protest might take the form of submitting a grievance, and then proceeding to the next steps which include a subject access request and finally an employment tribunal claim.

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.

 

 

 

Payment of benefits due like commission or bonuses: Use our free letter builder to expedite payment

Next Steps

Try our letter builder

If the issue relates to withholding of a contractual benefit such as commission or bonuses, you might like to try our Unlawful Deduction of Wages Letter Builder which is free to use. This app asks you questions about your case.  Then, based on your answers, it creates a without prejudice legal letter addressed to your employer, setting out your case for compensation.

It gives you the choice of asking for reimbursement of the payment(s) due and remaining in employment, or of proposing that you leave your job with compensation by way of a settlement agreement.

Get advice on your settlement agreement

If you manage successfully 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.  What’s more, our legal team comprises only senior employment law solicitors who are accustomed to winning cases – and representing  employees (rather than employers) is all we ever do.  So do get in touch –  it costs nothing to ask.

 

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