‘Employer can change contract without consent’ rules EAT

The Employment Appeal Tribunal (EAT) has ruled that an employer can make ‘unilateral’ changes to employees’ contracts without getting consent if their contract makes concessions for doing so.

Supermarket giant ASDA made contentious changes to employee contracts, regarding pay structure, after staff handbooks stated:

“ASDA reserves the right to review, revise, amend or replace the content of this handbook, and introduce new policies from time to time to reflect the changing needs of the business.”

The issue was raised when ASDA wished to amend the pay structure of a large percentage of staff, bringing salaries in line with a more up-to-date structure, accepted by the majority of employees.

700 employees brought claims to an employment tribunal, complaining of unlawful deduction from wages, breach of contract and some of unfair dismissal.

But the EAT upheld the tribunal’s decision in the supermarket’s favour, deeming that the wording of the handbook was “wide enough to permit the changes ASDA sought”.

Prior to the commotion, ASDA commenced an extensive consultation process with its employees over its aims to employ all staff on a "Top Rate" pay structure.

9,300 employees transferred voluntarily to the new regime while 8,700 refused. Therefore ASDA imposed the new pay structure on these employees without their consent.

Usually, an employer cannot impose changes to an employee's terms and conditions of employment without the employee's express consent.

But ASDA’s case shows that where the employer has relied on a variation clause which was clear, unambiguous, and covered the changes made, the relevant contractual term could be widely, and legally, enforced.