When an employer wants to change an employee’s contract of employment, they either need the contractual right, obtain their express consent or, unilaterally impose the change and imply it has been agreed to by the employee’s conduct.
The third (and riskiest) option was examined in the case of Abrahall & Others v Nottingham City Council.
The employer proposed a two-year freeze on pay– they argued that the alternative to the pay freeze was a large number of compulsory redundancies. The unions did not agree but when it was imposed, did not take any industrial action or write on behalf of employees to the effect that they did not accept the pay freeze and/or they were working under protest.
At the end of the two-year period, the council wanted to extend the pay freeze for a further period. The unions activated a formal collective grievance procedure, which was not resolved.
Several hundred employees brought proceedings in the Employment Tribunal for unlawful deduction of wages. The employer argued that, by their conduct in continuing to work without protest after the implementation of the freeze, the employees should be taken to have accepted a variation in their contracts for a period of two years.
The case made its way through to the Court of Appeal.
“It is not right to infer that an employee has agreed to a significant diminution in his or her rights unless their conduct, viewed objectively, clearly evinces an intention to do so. To put another way, the employees should have the benefit of any doubt.”
If there is a different explanation for the employee continuing to work, therefore, it is not acceptance of the new terms. It therefore held that the employees were entitled to arrears of pay equivalent to what they would have earned if pay progression had been operated in each of the years in which it was frozen.
Why is this important?
The case is a useful reminder to employers that it should not be assumed that an employee’s silence is sufficient to indicate implied agreement to a unilaterally imposed change. This is particularly relevant where the change imposed has no immediate impact on the employee.
If the employee does not agree to the change, they can work “under protest” and issue a claim for breach of contract or unlawful deduction from wages. This is sometimes referred to as “standing and suing”. If the change is sufficiently serious, the employee may resign and claim constructive dismissal. Alternatively, the employee may refuse to work under the new terms altogether and if the employer dismisses the employee as a result, this can lead to a claim of unfair dismissal.
Given the risks involved, it is important for employers to be clear on whether they have consent from employees to changes to their terms and conditions of employment. Although in principle, an employee’s continuing performance of their work may indicate acceptance of the change, that will not always be the case. Each situation will depend on its own facts, and this will require careful consideration by the employer.