UK: Varying terms and conditions of employment relating to pay

Not all proposed contractual variations need to be signed by employees to be effective. Sometimes an employee will, by his conduct, convey his agreement with the variation. As this case demonstrates it can, however, be risky to rely on conduct alone.

Employees of Nottingham City Council had a contractual right to pay progression. The Council wanted to end this right and offered its employees the option either to receive £100 in return for their consent to a change in terms, or to consent to a dismissal and immediate re-engagement on new terms. 90% took the first option and most of the rest were dismissed and re-engaged on the new terms. The Council then imposed a two year pay freeze. Certain employees brought claims for unlawful deductions from wages. The Council argued that the employees had accepted the variation in terms by continuing to work after the pay freeze without protest.

The Court of Appeal said that the employees were not to be taken to have accepted the variation particularly as it had been wholly disadvantageous to them and had been put to them as something for which their express agreement would be required. The Court noted that protest by the unions might be sufficient to negate any inference of acceptance despite the fact that the employees had said nothing.

Comment:

Always try to obtain express employee consent to a variation in terms, particularly if it involves pay or a change which does not have an immediate impact. If consent is not forthcoming, do not assume that because the employee continues to work on the new terms that the variation is accepted. Dismissal and re-engagement can be an option to secure new terms provided a proper procedure is followed.

Abrahall & Ors v Nottingham City Council (LINK)