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Forcing through contract changes in breach of contract
An employer that forces through a contract change, such as a pay reduction, that is not permitted by the contract, without the consent of the employees, runs the risk of a contract claim for damages, or a claim for unlawful deduction of wages. For example:
As a result of a financial crisis, the employer proposed a pay cut of around £30 per week. This was not agreed, but was introduced anyway. The employer’s engineering workers continued to work but sued for breach of contract in the civil courts. The House of Lords (now Supreme Court) upheld their claim and awarded damages for the difference in pay.
Rigby v Ferodo Ltd [1987] IRLR 516
In these circumstances, a claim in the employment tribunal for unlawful deduction from wages under section 13 ERA 1996, is usually more straightforward than a contract claim in the civil courts. An unlawful deduction of wages claim is also better if there is a risk of the employer trying to counter-claim for breach of contract by the employee. For more information see LRD’s annual publication Law at Work (www.lrdpublications.org.uk/publications.php?pub=BK&iss=1664).