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Question:	The Employer wants to change the employment contract but the employee refuses. What can the employer do?
Answer:	Employers cannot normally unilaterally impose new terms and conditions on employees, unless the employee agrees either by express consent or tacitly (ie doing nothing to challenge the change. It’s not uncommon though for an employee to refuse to agree to such a change, generally if it leaves them worse off as a result. For example in the 2005 case of Scott & Co v Richardson. Scott & Co, in the context of business reorganisation the company wanted to introduce a new shift system. However Mr Richardson refused to sign up to the new arrangement unless he got paid overtime. After seven months of haggling, Scott & Co dismissed him. Along with the normal fair reasons to dismiss someone, namely misconduct, redundancy or capability, comes the snappily entitled ‘Some Other Substantial Reason’, or SOSR for short as a sort of mopping up provision for dismissals which the Tribunals think are fair really. The company defended Mr Richardson’s claim, arguing SOSR. The EAT held that Mr Richardson had been fairly dismissed for Some Other Substantial Reason. Scott & Co reasonably believed in the business case for the change, and unless it was "whimsical, unworthy or trivial", that was sufficient. The company did not have to prove the advantages of the shift system. In Bateman and Others v Asda Stores Ltd 2010 the EAT has held that employers may reserve the right to vary employees' contracts unilaterally. After extensive consultation, most of Asda's staff voluntarily moved onto a proposed new pay regime. Asda also changed the pay for the remainder who did not agree because it had reserved the contractual right in its handbook to 'review, revise, amend or replace' the contents of the handbook, and introduce new polices to 'reflect the changing needs of the business'. Mr Bateman and others claimed unlawful deduction of wages but lost. Although, as a general rule, a variation of contract requires the consent of both parties, employers can reserve the right to vary contractual terms unilaterally, even if an employee suffers financial loss as a result. There may be exceptions where the employer's variation breaches the mutual term of trust and confidence. This could occur where the variation is unreasonable, arbitrary or capricious, or where the employer has failed to give notice of, or consult on, the change. Asda had not breached the mutual term of trust and confidence as it had given several months warning and consultation to employees before transferring them. Ordinarily Asda would have been required to obtain employees' consent to make fundamental changes to the employment relationship, this was not necessary where the handbook contained a clear and unambiguous power to vary contractual terms to reflect the changing needs of the business. There was no ambiguity in the wording of the power, even for staff who were 'not well educated or even literate'. Nb. Remember though that a fair procedure still has to be followed in this kind of situation. In the Scott decision, the ultimate sanction was to dismiss someone who refused to accepted changes to his terms and conditions. However in the Asda case, they could unilaterally impose the changes if they reserved the right to do so and they carried out adequate consultation beforehand. See also our page on what should go in employment contracts Last updated: July 2010.
James Carmody Employment Solicitor Reculver Solicitors 12-16 Clerkenwell Road London EC1M 5PQ www.reculversolicitors.co.uk info@reculversolicitors.co.uk Tel 0207 324 6271 Regulated by the Solicitors Regulation Authority © Reculver Solicitors. 2005-