Variation to employment contracts

In the current economic climate, employers need to have flexibility in their workforce. However, achieving that flexibility is sometimes complicated…

In the current testing economic climate, employers need to have flexibility within their workforce.  However, achieving that flexibility is sometimes made complicated by the law.  If an employee is asked to undertake duties outside the scope of their employment contract, they may be reluctant to do so. 

Achieving an agreed variation of employment contract terms is often possible, especially if discussions are handled carefully.  But if the required changes are not agreed, the employer may want to consider imposing change – for instance, by terminating the existing contract and offering continued employment on appropriately revised terms.  Such an approach is often effective – again, provided that it is handled efficiently and reasonably – but it can take time.

Sometimes, though, the legal complications need not arise.  The existing employment contract terms may provide for the necessary flexibility.  But for this to be the case, the contractual position needs to be assessed thoroughly. 

An example may arise where the employer wants employees to make use of new systems so as to work more productively and efficiently.  Back in 1984, employees working for the Inland Revenue argued, through their trade union, that the introduction of computers into some areas of the administration of PAYE required such changes in working practices that they amounted to a unilateral variation of contract.  The High Court was asked to consider whether the Revenue had broken the employees’ contracts by bringing in new technology.  The answer was no – and the Judge said: “there can really be no doubt as to the fact that an employee is expected to adapt himself to new methods and techniques introduced in the course of his employment”.  The employer would, of course, be under a duty to provide adequate training in any new systems. 

However, this principle cannot be pressed too far.  In the very recent case of Adamas Limited –v- Cheung, the Privy Council rejected the suggestion that any employee who continues to work after their employer has required them to do work outside the scope of their contract is deemed to have accepted the new working conditions.  In that case, a Mauritian assistant store manager was asked to help out by making deliveries when the person who normally did that job was on leave.  She took some items from one shop to another a couple of times, but refused on a third occasion.  Her employer gave her a warning for breaching her contract, which said that she would undertake any suitable duty.  Five months later, when she was again asked to make a delivery and refused, she was sacked.

Her claim for unfair dismissal succeeded.  When the case reached the Privy Council, it was made clear that the mere fact that Mrs Cheung had agreed to make deliveries twice did not mean that she had thereby agreed to extend her contractual duties to include making deliveries whenever requested.

The practical message is clear.  Employers need to make sure not only that their employment contracts are fit for purpose, but also that they understand precisely what they can and cannot ask their employees to do. 

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