Changing contractual entitlement

Where employers fail to secure agreement to the change they want, they may attempt to force it through by terminating the original contract and offering new terms — for example, with reduced sick pay.

An employer who terminates an existing employment contract and offers new terms is not in breach of contract, as long as full legal notice of termination was 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, forcing through change in this way is still a dismissal, and employees with at least two years’ service will be able to claim unfair dismissal. In some circumstances it may also be possible to attack proposed changes to sick pay on the basis that they are discriminatory, for example, against disabled or older workers (see Chapter 3).

In 2015, civil service union PCS won a key victory when the Employment Appeal Tribunal ruled that the National Audit Office did not have the right to change the contract terms of its staff (including sick pay) without their agreement.

For more information on contract terms, and information on how unions use the tribunal or court process to challenge cuts to terms and conditions, including sick pay, see Chapter 3 of LRD’s annual employment law guide, Law at Work (www.lrdpublications.org.uk/lawatwork).