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 negotiating process known as “collective bargaining” (see Chapter 5). 


Sometimes an employer tries to impose changes unilaterally by relying on a contract term that purports to allow reasonable future change to contract terms without employees’ consent. This kind of term might state, for example, that “the employer reserves the right to make reasonable changes to the contract terms”. This kind of term can only be relied on to make unilateral changes to contract terms where the language used is very clear and the employer acts reasonably. See also pages 73-74. 




Where an employer proposes 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 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 containing 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, page 338). 




An agreement to a change of contract can be express (for example, through verbal consent or by signing a new contract), or implied by conduct. For example, if an employer announces a change in start time from 9.30am to 9.00am and the employees come in at 9.00am the next day and carry on coming in at 9.00am without objecting, this creates an implied agreement to change the start time to 9.00am, even if they have not said “yes” or “no” to it.




It is important that employees are made aware that failure to oppose a change could mean they will be taken to have accepted it and may not be able to challenge it later on. 


Tribunals are generally reluctant to rule that a significant unilateral change has been impliedly agreed to by an employee through their action (or inaction) if the change does not have immediate effect. For example:


Tribunals will examine the whole context to decide whether an employee, through their behaviour, has impliedly accepted a contract change. An employee who gets the chance to ask questions or raise objections at the time and who chooses not to do this, or who objects to some changes but not others, may well be found to have accepted the changes they did not challenge, even if the changed terms only matter to the employee at the end of the employment (for example, cuts to redundancy pay). 




The fact that an employee has not signed to confirm their acceptance of new contract terms does not prevent those terms being impliedly accepted (see Wess v Science Museum Group [2014] UKEAT0120/14/0610).




Contract terms will be taken to have been impliedly accepted if that is the “only sensible explanation”, from the perspective of an outside observer. The fact that privately, the employee did not intend to accept contract changes is irrelevant, if that is how their behaviour looks from the outside. Here is a good example:


In Abrahall v Nottingham City Council [2018] EWCA Civ 796, the Court of Appeal (CA) gave important new guidance on when acceptance of a contract change should be inferred where employees continue to work without protest. In this case, the court concluded that three groups of council workers, represented by Unite, the GMB and UNISON, were contractually entitled to pay arrears representing the incremental pay rises they were denied as a result of the implementation of a two-year public sector pay freeze, following the 2010 introduction of austerity. The CA refused to accept that by continuing to work for two years under the pay freeze, the employees waived their contractual right to pay rises. In particular, the CA said that where, as here, a contract change is wholly disadvantageous to an employee, their acceptance is less likely to be inferred from a failure to protest. In addition, the CA said that collective resistance (in this case, balloting for industrial action) can, in some circumstances, be enough to negate an inference that individual employees have accepted a change by continuing to work. Finally, an employer that suggests to employees that the change could be imposed without their agreement is much less likely to be able to demonstrate that employees accepted that change by continuing to work.


If contract terms change, the employer must issue a new written statement of employment particulars, detailing the changes, within a month (section 4, ERA 96) — see page 69. 




An employer that changes its name must provide a new statement, which must include the date the employee’s continuity of service began.