Variation of Contract terms

Question 1

An employer may, after the commencement of the contract of employment, attempt to introduce changes, for example, to the working conditions or terms.

What are the ways in which a contract variation can take place?

Answer 1

1. Unilateral change (after giving notice)
2. Unilateral change (without notice)
3. By mutual agreement/consent

Question 2

Unilateral change (after giving notice)

Answer 2

The change in employment terms may be made unilaterally by the employer after they have given the employee lawful notice to terminate the contract.

This is construed as an Offer of Re-Engagement, which the employee may accept by, for example, turning up to work.

Question 3

Unilateral change (after giving notice)

What happens if the employee does not agree to the variation?

Answer 3

If the employer gives notice to vary the contract and the employee doe snot agree, the employer MUST give notice to terminate the contract.

This will amount to a dismissal and could potentially give the employee the right to claim unfair dismissal.

In such cases, the tribunal would need to consider if the employer acted reasonably in taking such action.

Question 4

Unilateral change (without notice)

Answer 4

The change may be made unilaterally by the employer WITHOUT giving notice to terminate.

If the change is sufficiently serious, this may amount to a breach of contract by the employer, in which case it will be liable in damages.

It is more likely that the employee will leave employment, and claim they have been constructively dismissed.

Question 5

Variation by mutual agreement/consent

Answer 5

The change may be made by mutual agreement, but without notice to terminate the contract.

This will vary the contract, as long as the change is supported by fresh consideration, or the employee is prevented from denying acceptance because they have adopted the changes.

Question 6

Can an employer use flexibility clauses to vary contractual terms?

Creswell v Board of Inland Revenue (1984)

Answer 6

Yes. Employers may use flexibility clauses by inserting a right in the contract requiring the employee to “perform such duties as may be required from time to time”.

Creswell v Board of Inland Revenue (1984)

The defendant introduced computers to replace manual processes. The court ruled that the jobs were recognisably the same jobs, just done in a different way and rejected the claim.