Contracts of employment: Can your employer change yours?

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

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 is 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 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 (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 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 it…

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. If that 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 that you suspect that you will be worse off, but you are willing to give it a go before taking further action.

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