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Which part of ‘contract’ do they not understand?

This is a short post about the substantive law, for once – which is not really what this blog is about. But I’m going to write about it anyway, because it bugs me.

A contract is a legally binding agreement. Agreement. The subtle clue is in the ‘agree’ part. Two parties make promises to each other.

A contract of employment is just a contract in a particular context: the employee promises to do work, and the employer promises to pay for it. And they agree whatever other terms they may choose, subject to various specific limitations imposed by statute: the pay agreed has to be at least the minimum wage; they can’t validly agree that the employee won’t have the right not to suffer discrimination or be unfairly dismissed. But basically it’s still just an agreement between two parties.

It’s surprising how often employers forget this, and write letters saying things like, ‘This is to give you notice that as from 21 July 2012 your contract will be changed…’ Unless your contract says in so many words that your employer can change your terms of employment by giving you notice, this just doesn’t work. (And even if your contract does say they can change things without your consent, it doesn’t necessarily work – this is a relatively complex area of law.)

If you wrote to them to say ‘This is to give you notice of a 30% increase in my pay as from 21 July 2012,’ they’d laugh. But it’s just the same: they can’t change your terms of employment without your agreement any more than you can award yourself a pay rise without theirs.

The balance of power may be such that they can get your agreement quite easily – by threatening to dismiss you if you don’t agree. But that’s quite drastic, and may expose them to the risk of an unfair dismissal claim.

3 comments

  1. Tom

    It’s an interesting point, and the assumption by employers (which seems to be backed by tribunals) that if employees don’t object then they must implicitly agree, flies in the face of the general contractual rule that silence cannot constitute acceptance. I suppose a similar, although slightly different scenario, is the ordinary contractual “battle of the forms” type situation.

    It would be interesting to see if an employee could in fact enforce their own change, e.g. “I am hereby changing our contract such that you must now give me two weeks’ notice for each year of employment”. If the employer simply failed to respond rather than continuing the relationship “under protest”, would the employee get their way I wonder?!

  2. Naomi

    It would be fun to try, wouldn’t it?

    What’s really bizarre is when tribunals insist that an employee has accepted a change ‘by conduct’ – i.e. by continuing to work – even when they have been protesting vociferously about the imposed change all the while.

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