Changing Contracts of Employment

10 April 2015

Maxine Orr advises on considerations when making changes to a Contract of Employment

An employer will often insert a clause into the contract of employment to allow unilateral changes to the contract.However the Courts and Tribunals have stipulated that clear and unequivocal language is required to be able to establish the right to make a unilateral variation to the contract of employment and such clauses will be carefully scrutinised to ensure that they encompass the particular proposed changes.A recent case in the Employment Appeal Tribunal looked at the wording of such a clause.

Ms Hart was employed at St Mary’s School in Colchester from July 2001.The contract of employment stated “in the case of the teacher on a part-time contract the fractional part will be notified separately and may be subject to variation depending upon the requirements of the school timetable”.

Ms Hart commenced employment working a two day week and this increased to three days, namely Tuesday, Wednesday and Thursday.

In 2013 the School wished to alter the timetables to enable particular core subjects to be taught in the morning and Ms Hart was invited to spread her working hours over five days instead of three.A major difficulty for Ms Hart was her need to avoid working on a Friday as she visited her elderly mother in Wales and not working a Friday and Monday facilitated this. A period of consultation ensued with Ms Hart but unfortunately agreement could not be reached between the parties.

The School nonetheless implemented the changes with effect from 1 September 2013.Two days later Ms Hart resigned stated that the School had chosen “not to make me an offer of reduced hours on the three days that I work” and that the School had imposed a five-day timetable “without any flexibility”.She issued proceedings for unfair constructive dismissal on the grounds that the School had committed a repudiatory breach of her contract by making a unilateral change to her working hours entitling her to resign.Her case was dismissed; the Tribunal Judge stated that the School had a contractual right to vary her contract of employment in the way that it had done so.It consulted with her, provided her with a business document explaining the changes and the reason for same and had allowed the employee to put forward her proposals.The Employment Tribunal’s reasoning for the decision was that under her contract she was required to be flexible in her working hours to meet the demands of the School and that specifically under clause 1.4 the part-time hours could always be subject to variation depending upon the requirements of the School timetable.

The Tribunal stated that this was precisely the type of variation that the School was seeking to make through the consultation process.Therefore there was no fundamental breach of the contract of employment.Indeed the Tribunal Judge went further and stated that the resignation letter made it clear that the employee had resigned because the School had refused to offer her reduced hours.Ms Hart appealed to the Employment Appeals Tribunal.

The Employment Appeals Tribunal overturned the decision. The Tribunal referred to the Court of Appeal Decision in the Wandsworth London Borough Council v D’Silva (CA 1998 IRLR 193) in which Lord Woolf stated that the power of unilateral variation was an “unusual” power and that such clauses are to be clearly stated and reasonably exercised. The Employment Appeals Tribunal stated that the reference in clause 1.4 of Ms Hart’s contract “fractional part” meant the amount of part-time working provided for by the contract and the second part of the clause provided that the notified hours “may be subject to variation depending on the requirements of the school timetable”.

The power to unilaterally vary the contract was not clear in clause 1.4 especially when it was possible to envisage a teacher applying to vary the contract as well as the School.

This case highlights the difficulties in trying to rely on a contractual clause to unilaterally vary a contract of employment.The basic principle at common law is that a contract cannot be varied unless both parties agree to the variation and therefore employers should exercise caution in attempting to rely on such a clause.

Maxine Orr is a Partner in Worthingtons Commercial Solicitors Belfast, specialising in employment law.

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