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Imposing Contract Changes on Staff - when can you?

Be wary of simply relying on a contractual variation clause in an employment contract to impose a variation of terms on a member of staff.

In a recent Employment Tribunal case (Hart -v- St Mary’s School (Colchester) Limited) the Employment Tribunal had to consider whether a variation clause in a part-time teacher’s employment contract allowed the School to impose a unilateral change to her working hours. 

The starting point is usually that changes to any terms and conditions must be mutually agreed.  Although employers often reserve a general right to vary the contract unilaterally, Employment Tribunals will very rarely uphold such clauses as an employer has to abide by the implied term of mutual trust and confidence. Having the right to vary terms will probably suffice for minor changes but what about more fundamental changes?

Mrs Hart was a learning support teacher at St Mary’s School in Colchester.  Her original letter of appointment did not specify fixed hours though she initially worked two days a week.  By the time she was issued with a contract of employment in March 2003, Mrs Hart’s hours had increased to 3 days a week.

In 2013 the School decided to change its timetable so that particular core subjects could be taught in the mornings which required changes to working hours.  Mrs Hart was asked to spread her working hours (the actual number of hours were to remain the same) over five days rather than three.  Mrs Hart was consulted on this proposal but the School could not reach an agreement with her.  The main issue was that Mrs Hart had to avoid working on Fridays due to family commitments. 

Due to Mrs Hart’s failure to agree, the School insisted that the changes would be implemented with effect from 1 September 2013 anyway.  On 3 September 2013 Mrs Hart resigned stating that she would remain employed until 31 September 2013 but reserved her right to bring a claim against the School.  In her resignation letter, she claimed that the School was not entitled to rely on the variation clause.  Mrs Hart then brought a claim of constructive dismissal against the School.

The Employment Tribunal rejected Mrs Hart’s claim on the basis that there was no custom in practice that Mrs Hart would only ever work three days a week and so there was no breach of contract.  The Tribunal also referred to the School’s contractual right to vary Mrs Hart’s hours and the fact that the School had consulted with her in good time, provided her with the business rationale for the changes, and allowed her time to put forward her proposals.  The Tribunal found that the contract required Mrs Hart to be flexible to meet the demands of the School. 

Mrs Hart appealed to the Employment Appeal Tribunal.  The EAT found that, as a part time worker, it had been agreed that Mrs Hart would only work three days a week.  The EAT also disagreed with the Tribunal’s finding that there had been no breach of contract. The EAT found that the School was not entitled to unilaterally vary Mrs Hart’s employment contract.

The EAT concluded that the imposition of a five day week on a part time employee who had been working three days a week was a fundamental change which potentially breached the implied term of trust and confidence. The EAT sent the case back to the Employment Tribunal to determine whether or not Mrs Hart had resigned as a result of this fundamental breach of contract. 

This case provides further evidence that employers should not simply rely on contractual variation clauses and should always keep in mind the implied duty of mutual trust and confidence.  If substantial changes are needed, and there are genuine business reasons for the changes, then, if agreement cannot be reached after a thorough consultation process, it will probably be better to dismiss and offer to re-engage on the new terms.

If you would like to discuss this or any other aspect of employment law with the team please telephone Simon on 0113 220 6274 or email SimonShepherd@schofieldsweeney.co.uk

About the Author

Simon Shepherd

Partner

As Partner and Head of the Employment department Simon undertakes all types of employment work.…

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