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Changing Terms and Conditions of Employment

We deal with a number of requests about how to go about changing employees’ terms and conditions of employment, usually to try and safeguard jobs and/or make the company more competitive. Normally, it is a very difficult process and you require their consent before making any changes. This can be obtained either at the time the change in terms and conditions is proposed, or by the contract itself authorising the change.

This general principle has been extended by the Employment Appeal Tribunal (EAT) a recent case, specifically Bateman v Asda Stores.

Asda wanted to ensure that their entire store employees were employed on the same pay and work structure, meaning that those who were working under their old regime would need to transfer to the new proposed regime. Asda’s employee handbook provided a clause that “reserved the right to review, revise, amend or replace the contents of this handbook, and introduce new policies from time to time reflecting the changing needs of the business.”

The handbook also contained details of pay and other conditions of employment.

The Employment Tribunal held that this permitted Asda to impose their new pay regime on employees without obtaining their further consent. The employees at Asda argued that Asda could not rely on the conditions in the handbook to justify imposing the new regime and that they should obtain the consent of all affected employees.
The EAT dismissed the employees’ appeal and held that the Asda staff handbook permitted the company to make the changes to the pay and working regimes without obtaining the further consent of employees.

What does this mean for my organisation?

Don’t get carried away as it’s unlikely you will be able to make wide-ranging changing based on your staff handbook!

It is important to have terms and conditions of employment, and we recommend a staff handbook with specific clauses to suit your business. The handbook should be referenced with your contracts of employment, and you should specifically state if you reserve the right to make any changes.

The case with Asda was decided on very specific circumstances as they sought to ensure that no employee suffered a reduction in his or her pay, as a result of their decision to amend their contracts to incorporate the new regime. In addition, there was also an extensive consultation process concerning Asda’s wish for its store staff to adopt the new regime. Effective consultation is the key to any proposed changes, and in the current economic climate this is usually looked on favourably by employment tribunals if the changes are brought about to maximise jobs and improve efficiencies.

If an employer does not act as reasonably, and it was held that this had led to a breach of trust and confidence, it is likely the tribunal would reach a different decision.

Do you have staff handbooks and contracts in place?

We can review your existing contracts and handbooks, and if you don’t have any you should contact us for advice. If you require any other HR advice, explanation or support, please call us today on 0800 612 4772 or get a Free Quote for HR Services via our website.

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