Do employees accept a variation to their contract when they continue to work?
Introduction Nottingham City Council stopped their usual incremental pay progression for employees, without asking for their consent. They said that the alternative would be a… Read more
Nottingham City Council stopped their usual incremental pay progression for employees, without asking for their consent. They said that the alternative would be a large number of compulsory redundancies. The pay freeze was opposed by trade unions, who threatened industrial action, but ultimately none was taken. Nor did any employee raise a grievance, until a similar freeze was imposed two years later, when many claimed for unlawful deductions from wages.
The Court of Appeal had decided that the incremental pay progression was a contractual right. It then had to decide whether the employees, by continuing to work for over two years without protest, had impliedly accepted the change.
The court determined that one needs to assess what inferences should be drawn from the particular circumstance of the case; an employee who works without protest will not always be deemed to have agreed to a contractual pay cut. And, even if the individual employee does not protest, an objection from a trade union or employee representative may be sufficient.
If, by continuing to work, the employee’s conduct is reasonably capable of a different explanation then, the court decided, they should not be treated as having accepted the new terms. In this case, it was determined that the employees continued to work because they wanted to avoid compulsory redundancies, and did not do so because they accepted the change to their pay.
The Council had always taken the view that they were not implementing a contractual change, so it may not have been clear to the employees that they should have protested. Additionally, the variation was wholly detrimental to the employees. If they had received some benefit, it would be more likely that, by continuing to work, they would be deemed to have accepted the contractual variation.
Conclusion and practical points
The case demonstrates that if an employer wishes to change an employee’s contract without requiring their express consent, then passage of time may not be sufficient to deem acceptance. Relying on implied acceptance will therefore be a risky approach.
If an employer wishes to rely on implied acceptance, then all relevant circumstances should be assessed. And if the employer goes ahead and makes the change unilaterally, it should be as up-front as possible regarding the change. Offering some immediate benefit to the employee will also help, as it would be more difficult for the employee to take the benefit without also being deemed to have accepted the detriment.