Contract changes 


Employers should never make contract changes without consulting either the union, other employee reps (if there is no recognised union) or the individual employee. 


Contract terms can only be changed through agreement. Where a union is recognised, agreement should be reached through the process of negotiation known as “collective bargaining”. 


Sometimes change is imposed unilaterally by the employer relying on a so called “flexibility” term in the contract that purports to allow future change to contract terms without employees’ consent. There is more information about this kind of term on page 79. 


Where an employer proposes to make major changes to the terms and conditions of 20 or more employees at one establishment within a 90-day period, the obligation to consult collectively for 30/45 days under the Trade Union and Labour Relations Consolidation Act 1992 (TULRCA) is triggered. Where a union is recognised, consultation must be with the union. Failure to consult collectively will result in liability for a protective award (GMB v Man Truck and Bus UK [2000] IRLR 636). See Chapter 11 for more information. 


An increasing number of employers are opting to impose significant changes to contract terms by dismissal and re-engagement. This involves the employer ending the existing employment contract, while simultaneously offering replacement contract terms that contain the desired change. An employer that engages in this practice is not in breach of contract as long as full legal notice of termination is given (Kerry Foods v Lynch [2005] IRLR 680). This is because by giving notice to end the contract, the employer is complying with the contract rather than breaking it. However, it is still a dismissal, and employees with at least two years’ service will be able to claim unfair dismissal (see Chapter 10).