Andrew James looks at how challenging changes to terms and conditions and negotiating current rights into collective agreements can be the most effective weapons for unions against government assaults on employment rights

As many public and private sector union members face the threat of redundancy, others have the uncertainty of changes to terms and conditions, including cuts in pay and benefits.

For unions, it is vital that their members know such moves may be unlawful and how they can be challenged legally.

Contracts of employment

A contract of employment is a legally binding agreement which holds both employers and employees to its terms. Usually, neither side can alter the terms without the agreement of the other.

This should always be the starting point when representing an employee or group of employees negotiating a contract of employment and especially when opposing changes.

Over the course of an employment relationship, an employee’s terms and conditions are likely to change by agreement with employees and their representatives.

But when an employer tries to reduce financial benefits or restructure shift patterns (often with the claim that it is the only way to avoid redundancies) without the consent of employees and their representatives then they may be in breach of employment rights laws.

Terms and individual contracts of employment can be changed in the following five ways:

  • The employer and employee agree on the change.
  • The employer imposes the change and the employee is deemed to have accepted it by carrying on working without protesting.
  • The contract itself provides for changes.
  • The contract is varied by collective agreement with a trade union which is binding on individual employees.
  • Dismissal from the old contract with an offer by the employer of re-engagement on the new terms.

Changes to terms and conditions may not just be unlawful in themselves but can also contravene the Equality Act, the Working Time Regulations and National Minimum Wage Act. It is important to consider this when opposing any changes that erode the rights of members and when seeking remedy through a court or employment tribunal.

Statement of particulars

An employment contract will not necessarily be in writing, but an employer must provide an employee, after one month of the start of their employment, with a written statement of particulars of employment.

The statement should include details of the main terms and conditions including rate and frequency of pay, hours, holidays, sickness pay scheme, pension scheme, place of work and details of the disciplinary and grievance procedure.

Although such a statement is not a contract of employment, it is strong evidence that certain terms have been agreed between the parties especially when the employee has signed it.

Changes to terms and conditions

Only contractual terms require consent to be changed. Non-contractual benefits or provisions in policies can be modified or withdrawn at any time. So it is important to identify whether the change relates to a contractual or non-contractual term. This may also involve consideration of whether a term can be “implied” if it is not expressly made.

For example, something that has become custom and practice, such as an enhanced redundancy scheme not written into a collective agreement, cannot automatically be contractually implied.

Where a variation has been expressly agreed between the parties, it is enforceable and can only be changed by agreement in writing or orally. For example, an oral agreement that an employee would change from working day shifts to night shifts could not just be reversed by an employer.

Where an employee’s terms and conditions change, the employer is obliged to issue the employee with a written statement of the change within one month of its taking place. However, the fact that a statement of change has been issued does not mean that the change is legally effective unless it has been lawfully implemented.

Implied agreement

This usually occurs where an employer has changed terms and conditions unilaterally by imposing them on the employee. If the employee remains in employment working without objection under the new terms, the employer may argue that the employee has agreed to the changes. In these circumstances there will be no on-going breach of contract.

It is therefore vital that employees and their representatives make their objections clear, preferably in writing, if they are continuing to work under a contract where the employer has made a unilateral change and they do not agree to the change.

In cases where the employer simply delays in responding to a letter of protest or dealing with a grievance that has been lodged objecting to the change, employees should write to the employer on a regular basis confirming that they are continuing to work under protest as per their original letter. This protects the employee and undermines any argument by the employer that the employee has acquiesced to the breach. Ultimately, legal action might be necessary to force the issue.

Contractual right to vary

Contracts of employment may themselves allow an employer to make changes, as long as this is expressed in the contract.

Flexibility clauses such as mobility clauses are a common example of this. An employer who wishes to change the place where an employee works will usually be able to do so if the employee’s contract contains a mobility clause, provided that the clause is exercised fairly.

Unilateral variation

When an employer is determined to introduce a change to terms and conditions but cannot do so by agreement, they will either just impose the new term or terminate the relevant contracts and offer new contracts of employment which include the change – the tactic of “fire and rehire”.

Depending on the course of action taken by the employer, there are various legal options for workers, in addition to any collective action:

  • Accept the breach by carrying on working under the revised terms.
  • “Stand and Sue” – that is stay and work in accordance with the new terms, but make it clear that this is under protest, and bring an action for breach of contract in the High or County Court. If the breach of contract involves a shortfall in wages, claim in the tribunal under the protection of wages provisions of the Employment Rights Act.
  • Resign and claim unfair constructive dismissal.
  • If fire and hire tactics have been used, employees can claim unfair dismissal.
  • Or they can just refuse to work under the new terms (likely to result in dismissal).

Unless the employer is making changes that will cause a financial loss to the employee, remedies are limited given the reluctance of courts to grant injunctions and declarations.

Employers making changes to terms and conditions will usually argue that a dismissal is for “some other substantial reason” (SOSR) for example if they are seeking to cut pay or other benefits.

Tactics

Case law on SOSR dismissals is not particularly helpful to employees, but there are tactics for unions to consider that are likely to get the best results for members.

In any negotiations on terms and conditions, the starting point should always be that the contract is sacrosanct and there is no statute or case that allows an employer to unilaterally vary it where there is no contractual right to do so.

If the employer is seeking to unilaterally impose wage cuts, the union should make it clear it will advise members to lodge a grievance and an unlawful deduction of wages/breach of contract claim. It could advise it intends to use a Hogg -v- Dover College argument.

This argument can also be used where changes the employer is trying to impose do not lead to financial loss. Depending on the circumstances, union members can lodge section 11 ERA 1996 claims, unfair dismissal claims or seek a High Court declaration for breach of contract. Although there are risks and a declaration does not compel an employer to revert back to the previous terms and conditions, these moves will at least put pressure on them.

The union can also assert that the changes would amount to a fundamental breach of contract and that employees are entitled to resign and claim constructive dismissal. This raises the stakes with employers, even if it’s not a genuine possibility.

If the union feels it has no choice but to agree to eroded terms and conditions, it should attempt to avoid having them written into every contract of employment or have them limited for a defined period after which, subject to any further negotiations, they will revert back to the old terms.

If the changes are to the rate of pay, it will be important to attempt to ensure pension contributions will not be reduced. And it should negotiate with employers now to enshrine existing statutory rights into collective agreements.

Unions negotiated rights, such as paternity leave and flexible work, into agreements before those measures were enshrined in law. It didn’t cost employers anything then, and it won’t cost employers now to include currently automatic rights that the government is taking away, whatever ministers claim about burdens on business.

In the current climate, trade unions are increasingly becoming engaged with employers trying to erode terms and conditions. Whether a legal remedy is available will always depend on the facts of the case.

The law does not make court and tribunals the easiest arena in which to defend members’ terms and conditions. Although a legal challenge can sometimes increase the bargaining power of trade unions, it is usually no substitute for industrial muscle.