‘Your Business is Our Business’
A contract of employment is a legally binding document. However, it is likely that over time there will be a need to consider changing contracts of employment due to situations arising that were not foreseen when the original contract was drafted.
The reasons behind this would normally concern business reasons for example, a requirement for the inclusion of restrictive covenants preventing employees soliciting clients away from the business, or a serious downturn in business needing employees to accept a reduction to their individual wages http://www.acas.org.uk/index.aspx?articleid=3971.
Existing employees need to provide their consent making the contract changes. It also worth pointing out that a contract of employment exists even where it has not been issued to the employee in writing.
The process involves consultation to explain the desired changes and further consultation to overcome any objection to the employee agreeing to their contracts of employment changing.
In our experience objections from employees can normally be overcome. However, from time-to-time an isolated employee may simply refuse any changes being made to their individual contract. Assuming that the employer wants to continue with their plans then there are various options open to them. These include simply implementing the change. This method will be in breach of contract and therefore changing contracts of employment this way will incur a high risk of legal action. However, if the changes are not objected to they will become accepted and therefore binding.
Alternatively, where the the employer may have to consider dismissing the employee, for ‘some other substantial reason’ (“SOSR”) and offering a new contract inclusive of the revised and desired changes. If the employee does not accept the revised contract they will be dismissed for SOSR which is a potentially fair reason for dismissal (Employment Rights Act 1996). http://www.legislation.gov.uk/ukpga/1996/18/section/98
If you are an employer considering making contract changes then we can help. Our team of experts has significant experience in advising clients on these matters. EBS Law has successfully defended employer clients in the Employment Tribunal who have dismissed employees for refusing the change of contract.