Changing terms and conditions of employment- be careful!

Written by Brabners LLP

A question often asked by businesses is, “If I change my employees’ terms and conditions and they don’t complain, does that mean that they have accepted the changes?” Unfortunately, the answer to this is not always the one which businesses like to hear, as was reiterated in a recent Court of Appeal case. 

In the recent case of Abrahall v Nottingham City Council, Nottingham City Council had sought to regularise pay systems by implementing a single, simplified system where pay scales were determined by spinal column points. Not only was a new pay structure implemented but the council also announced a proposal to freeze incremental pay progression for two years. This meant that employees would not receive a pay increment. The trade unions protested about this on behalf of the employees and balloted for industrial action, but none was taken. The proposed freeze then came into effect.  It was only later when the council decided to extend the freeze that the unions initiated a formal collective grievance and legal action was taken seeking to recover the lost pay increases as a breach of contract.

One of the key issues for the court to determine in this case was whether the employees had accepted a variation of their contracts (i.e. agreed to forgo annual pay increments) by continuing to work over the course of the two-year pay freeze. It was held that there was no implied acceptance of the pay freeze and it was noted that although the unions had gone quiet after their concerns were ignored, they had nevertheless made clear their unequivocal objection on behalf of the employees. This unequivocal “no” to the change could not be turned into a “yes” purely by the employees’ silence over a period of time. A decision not to do anything was not the same as implied agreement.

Implied agreement to variations of terms by way of silence is a rather contentious area of law that very much depends on the facts and circumstances of the case. Varying terms and conditions of employment, particularly where the changes are to the employees’ disadvantage, can be difficult to achieve. In practice, the approach which employers take is key, especially if the right strategy means that express consent to the change can be achieved and the problems experienced by the council in this case avoided.

This article is for general guidance purposes only and should not be used for any other purpose.

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