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The science museum and the missing exhibit

Neat and tidy personnel files are the objective of every HR manager, but all too often – and for a variety of reasons – there will be gaps in the…

Neat and tidy personnel files are the objective of every HR manager, but all too often – and for a variety of reasons - there will be gaps in the records. The management of staff issues when the files are incomplete can be difficult.

This was the problem which the Science Museum faced when they came to dismiss Jane Wess and they looked into her file to establish her notice period. They found two contracts: a signed one showing that she was on six months’ notice and a more recent – unsigned – contract showing that notice had been reduced to three months. It was unclear whether the original contract had been superseded by the more recent, unsigned contract – which did not bear evidence of acceptance on its face.

In fact Ms Wess had more than thirty years’ service but some nine years ago there had been a restructuring exercise. She had been offered a new role and had been sent a new contract, which she was asked to countersign to signify her acceptance. There was no evidence that Ms Wess had ever done so - yet she had been in that new job ever since and there was no evidence that she had objected to the new terms.

The Employment Tribunal found that the new terms had been accepted even though she had not signed to acknowledge acceptance, as required. They found that she was intelligent and well-educated; that she had been actively involved with her trade union for many years; and they thought that, had she disagreed with the new terms, she would have said so.  The new contract was therefore deemed to have been accepted. The Employment Appeal Tribunal agreed.

This is an awkward issue and each case will always be sensitive to the precise facts.

As the EAT stated in its decision “when considering whether the conduct of an employee amounts to acceptance of a variation in terms and conditions, ETs should treat with caution the argument that the employee has impliedly accepted a unilaterally imposed new term”.

Given the usual balance of power in an employment relationship, Courts and Tribunals are sensitive to the risk of employers railroading employees into changes to their terms and conditions of employment. Reviewing previous cases on this issue, the EAT in this case made clear that the mere passage of time is not enough of itself to signify acceptance of new terms. It is necessary to look at the fact that the employee continued to work once new terms had been proposed and to ask whether that was necessarily consistent with the new terms.

In the Science Museum case, the new terms were wrapped up with the new role, so the fact that Ms Wess continued to work indicated acceptance. It would have been inconsistent for her to take the new job but to maintain that her previous terms – which attached to a different job – applied to the new position. The situation would be different where the employee can quite properly continue to work under the old terms because the proposed change does not necessarily require acceptance in order to create the basis for continued work – the removal of a benefit or a change to redundancy terms would be examples of the latter.

Convenient as the outcome of the case was for the Science Museum, it is an argument of last resort and the Museum would not have had a problem in the first place had they chased down the employee to deliver written acceptance. It is a reminder that reliance on “tacit acceptance” is never satisfactory. When seeking to change terms and conditions, it is best practice either to reach written agreement on a change or to make it clear that employment may only continue should the new terms be accepted. They may be couched as an offer of new employment, to follow immediately on from the termination of employment on current terms.

Current best practice – itself something of a change from a more relaxed approach in earlier years - follows from the decision of the House of Lords in Rigby v Ferodo. In that case, the employer wished to introduce a unilateral pay cut. The employees worked on under protest – claiming that they were continuing to work on their old terms and that their continued work was not evidence that they accepted the new rates of pay; the Court had to consider whether this was a sustainable argument. They had no difficulty in doing so, taking the view that a contract of employment was, in this respect, no different from a commercial contract, in that employees could refuse to accept the employer’s breach and continue to insist on performance of the contract.

Whether or not you agree that that is a realistic way to look at the contract of employment, reliance on some sort of stand-off is always going to be precarious. The safe procedure when changing terms and conditions is either to reach written agreement on the change, or to terminate employment and to make it clear that continued employment thereafter is only open on the basis of the new terms. In those circumstances an attempt by the employee to return to old terms would have very little chance of success.

If you are thinking of making changes to employee terms and conditions we would always suggest you tale legal advice first to avoid any unforeseen consequences. Please do not hesitate to get in touch with your usual Weightmans contact or Michael Ryley (michael.ryley@weightmans.com) to talk through your plans.