Evaluation of Employer's Express Power to Change Contract Terms

This research report investigates the extent of an employer's power to modify contract terms when selecting employees for redundancy. It explores the legal framework surrounding employment contracts, focusing on the rights of employers to make changes and the limitations imposed by employment law and tribunals. The report examines the rationale behind employers reducing labor costs, the implications of unilateral changes, and the importance of maintaining trust and confidence in employee relations. It addresses research questions concerning the reasons for contract changes, the extent of employer authority, and the potential impact on employees. The methodology involves an interpretivism philosophy and a descriptive research design, utilizing secondary data sources and thematic analysis. The literature review covers key cases like Bateman v Asda Stores Ltd and Wandsworth LBC v D'Silva, examining the role of collective agreements, economic downturns, and the legal mechanisms for incorporating changes into individual contracts. The report highlights the complexities of UK employment law and the need for judicial intervention to balance employer power and employee rights. The Black Letter Approach is used to analyze the legal rules related to the employer's power to change contract terms.

RESEARCH PROPOSAL
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Table of Contents
Rationale of the study ..........................................................................................................................3
Aims and Objectives ............................................................................................................................3
Research Questions..............................................................................................................................3
Research Methodology.........................................................................................................................4
Literature Review ................................................................................................................................5
References..........................................................................................................................................10
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Title: Evaluation of Employer's Express Power to change contract terms in selection for
redundancy
RATIONALE OF THE STUDY
The present research report has been made with an attempt to ascertain the extent to which
employers can make changes in the contract terms for managing the process of redundancy.
Employers have the right to make changes in the contract laws so that alterations can be made to the
employment policies. Detailed information is mentioned in the study about the employment tribunal
which have statutory jurisdiction to hear many kinds of disputes between employer and employees
(Zimmer, Sullivan and White, 2008). Further, as per the employment tribunal, employer has the
right to develop certain changes in the terms and conditions of the employment without acquiring
consent of the employee.
The present research study has been describing the reasons for which employer reduces
labour cost. The employment tribunal held with no reason in contract law for the purpose of
preventing an employer from reserving the right to amend any of the contract aspects unilaterally.
Moreover, several laws related to power of employer have been stated through which the employer
can change the amendments of employment. In most of the past studies, it has been discussed that
employer needs to imply duties to maintain trust and confidence in employee affairs and at the same
time; the services to employees can also be extended.
AIMS AND OBJECTIVES
Main aim of conducting the research study is to identify the extent to which employers have
the power to change the contract terms in selection for redundancy. Further, several objectives have
been determined so as to deliver suitable direction to the research report.
 To ascertain the rights of employers in contract terms
 To identify the dimensions that are included in the employment and contract law
 To identify the reasons for which employers can facilitate redundancy
RESEARCH QUESTIONS
Research questions are required to develop in the research project so as to present the
arguments in appropriate manner. In the present research study, several research questions have
been framed so as to give clear purpose to the research study as per the selected field of research.
Research questions for the present study are mentioned in the below section:
 What are the reasons for which employer make changes in the contract laws?
 Up to what extent, employer can amend the rights and responsibilities of employees?
 What new things can be provided to the employees as per the contractual agreement?
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RESEARCH METHODOLOGY
Research methodology is considered as the major section of research study where in
researcher is required to undertake different tools and techniques for the purpose of reaching
towards the aims and objectives. It is termed as most important section of a certain research through
which investigator selects different elements and procedure for controlling different aspects of
investigation as per the objectives of research. Therefore, evaluation of different tools of study is
mentioned below that would be considered by investigator in further research:
It is termed certain ideology and conceptual framework which is considered by researcher
while handling different operations of investigation. In this context, two types of philosophies such
interpretivism and positivism will be available for investigator in order to carry out detail evaluation
of employer's express power to change contract terms in selection for redundancy (Dau-Schmidt,
2001). In the context of present study, interpretivism philosophy will be finding most appropriate
for assessment of wide range of data related to different elements of employment contract.
As per theoretical nature of investigation, researcher will consider descriptive research
design. This is because this tool has found very effective in evaluation of wide range of data that are
based on certain theories and assumption. In the contrary, exploratory research will not appropriate
for the present research work. This is because this approach will provide great in evaluation of
statistical data and some certain facts that have been acquired from certain facts and evidence
(Smith and Morton, 2001).
Data collection is the most important section of investigator. Therefore, researcher is mainly
scheduled whole research through primary sources or secondary sources or both sources. The
primary research is carried out by assessing the through interviews, questionnaire, observations etc.
By using these sources, researcher is able to assess fresh information as per the objectives and goals
of investigation. In the contrary, collection of secondary data is carried out by assessing information
from books, journals, past studies and online sources. In the present investigation, researcher will be
tired to examine the employer's express power to change contract terms in selection for redundancy
so as researcher will consider secondary sources for collection of wide range of that as per research
goals (Schwab, 2001). The evaluation of secondary data will assist researcher for carrying out
literature review process and investigation will be able to generate appropriate outcome. In addition
to that the information assessed through secondary sources will provide significant assistance to
researcher in order to develop in-depth understanding associated with topic of investigation.
Apart form that the analysis of data is identified as very crucial part for investigator in each
research. In the present research work, investigator will consider secondary sources in order
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generate appropriate outcomes as per the objectives so as thematic analysis will be applied by
researcher (Stone, 2006). This approach will help research in evaluation of wide range secondary
data as per research goals. In this process, researcher will create some themes with reference to
objectives and analysis of data will be scheduled with the help of these themes.
In addition to that researcher could ensure about validity and reliability of data along with
research outcomes by considering appropriate and authentic source of secondary data so as
objectives of investigate could be achieved with an efficient manner (Befort, 2001). Furthermore,
researcher would address some issues for handling different operations of investigation such as
delay in completion of investigation as per the predetermined schedule and lack of coordination
among different operations.
In the present research report, researcher has been adopting Black Letter Approach which is
a well established technical legal rule subjected to reasonable dispute. Black letter law can be
contrasted with the legal theory or unsettled legal issues such as changes in employment laws and
regulations (Twomey, 2012). The letter of law is its actual implementation because it demonstrates
that black letters are those rules that have been written down or codified in legal texts throughout
the specific state law. This is perhaps the case for many precedents that lies in the common law.
LITERATURE REVIEW
Changing terms and conditions of employment is a central way to cut the employment costs
and while implementing these changes, employer has to consider whether the term is contractual.
Along with the same, the terms can be lawfully changed; however on the other hand if the term is
not contractual, then in that situation, changes can be made unilaterally (THE EMPLOYERS’
RIGHT TO REWRITE THE CONTRACT, 2000). In the case, if this is done abruptly or without
consulting others, then the employer can be held liable for the act of breach of contract or he can
also be held liable for breaching the duty of trust and confidence. When the term is contractual, then
it becomes necessary to identify the source of the term prior considering the ways of changing the
same. It is also important to see if there is a mechanism for facilitating change in the contract of
employment; nonetheless, if the source of a term is a collective agreement with a trade union, then
the apparent mechanism for change will be to seek the agreement along with the conditions of trade
union (Dau-Schmidt, 2001).
In the period of economic downturn, several business entities emphasize on restructuring
and redundancies aspects; however most of the time it does not work out, thus during that period,
employer prune the labor costs (Stone, 2006). As per the new terms and conditions, employers
reduce the salary structure of the employees for the purpose of managing restructuring processes.
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Employers are bound to comply with the legal procedure so as to undertake the period of
consultation with the staff members and this might further lead to protracted negotiations with trade
unions and other workable representatives. The views of most of the authors have described that the
process is uncertain and it can generate stressful situation for the entire staff management. For
instance – the process of selection for redundancies have a negative influence on the motivation
level of staff and possibly on the performance of management as well. But, in most cases, it will be
an economic necessity to cut down the labour cost so as to ensure that business can survive properly
for long term in the competitive market place (Stone, 2000).
In the year 2010, the Employment Appeal Tribunal in London issues its judgment in
Bateman v Asda Stores Ltd which upholds the decision of the employment tribunal. This includes
the aspect that employer posses the right to vary the terms and conditions of employment without
expressing its need to the employer. During that time, EAT held the right which needs to be
included in company's handbook and that also provides lawful evidence where in changes are
required to be properly implemented (Stewart, 2008). This power further may be extended where in
employer has to pay for employee holidays and employer can also pay for other contractual
entitlements of employees. It may also be argued that it fails to express the concerned issues of
inequalities prevailing among the parties. Such cases highlight the chief difficulties which exist in
the UK employment terms and which can also bind the employer and individual employee and
different types of contracts. Hence, as per the Bateman decision judicial intervention in UK can be
applied with reasonable terms so as to maintain trust and confidence (Estlund, 2006).
It also considers the effects of the legal mechanisms of incorporation of collective
agreements into the individual contract. Alongside, the same statutory intervention could also be
considered in this situation as that restricts the freedom of contract for re-managing the imbalance
of bargaining power in the employment relationship (Smith and Morton, 2001). Thus, according to
the same these issues are regarded in the context of current policy developments at EU level.
Moreover, as per the general law of contract, parties are required to develop valid and legal
obligations so that necessary changes can be applied in the contractual aspects. Consensus
requirements are also mandatory to be followed by considering the acquiescence of both the
contractual parties. It is also significant because several provisions are added in the contract law
which classifies the working conditions for the employees. However, it is required to consider that,
in the context of statutory claims for unfair dismissal, employee can propose new changes and
alterations to contract terms and this further carries a threat of potentially fair dismissal (Schwab,
2001).
Before examining the Bateman case, it is essential to consider first the decision which the
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Court of Appeal has taken in Wandsworth LBC v D'Silva. As per the case, the general position is
that contracts of employment can only be varied by agreements; however in the employment field,
employee can reserve the ability to change particular aspects of the contract unilaterally by
notifying the other party about the particular situation (Sachs, 2008). There should be proper
language reserved in the same dimension to different parties and in addition to the same, the court
can also favour interpretations which consist of different contractual provisions and which are even
mandatory to consider. To apply a power of unilateral variation to the rights which an employee is
given under the part of the code can produce unreasonable results and the courts can also construct
a contract of employment (Freedland, 2005). The ET held that no such case had been made earlier
by the claimants; moreover the courts can also held new changes without giving warning and
without consulting others. This might consider as breach of contract because of the implied term of
trust and confidence (Rothstein and Liebman, 2003). However, in this case, sufficient notice and
consultation is required prior making any changes in the contractual aspects.
During that time period, the ET was satisfied because it seeks to rationalize the pay structure
along with the power to vary the contractual provisions; hence it reflects the changing needs of the
business. This is the reason the claimant appealed to the Employment Appeal Tribunal. Four
grounds of appeal were argued by the claimant where in the first ground submitted had failed to
apply proper pinholes of construction by failing to consider the change in the new regime
(Freedland, 2005). The major reason for which the employer can make changes in the contract is to
make improvements in pay or working conditions and also to improve organizational practices and
environment. An existing contract of employment can be varied only with the agreement of both the
concerned parties. However changes may be agreed on an individual basis or through collective
agreement by considering their representative (Estlund, 2006). Further, an employer who is
proposing to change employee's contract of employment should have to consult with the employee
representatives and after that all the parties have to discuss things with each other regarding the
reasons of change.
Variations to the contract can be agreed verbally and non-verbally and it is also preferable
for any agreed changes which ought to be recorded in written format. However, when a variation to
the contract has been agreed and particular changes arise, the employer should give written
notification of the change to the respective employee within the period of a month from which the
change takes place. It is not mandatory for the employer to include express contractual right to lay
off the employee (Dau-Schmidt, 2001). However, an employer introducing short time working
arrangements may face unfair constructive dismissal claims (which is held for deducting the amount
from the salary). Further, employer can also face issues related to unlawful deduction from wages.
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However, in the same respect, clause of entitlement specifies a common holiday year in order to
reduce administrative difficulties by ensuring that the holiday year runs from the same date for the
employees. Considering the same facet, it is statutory requirement for the employer to include terms
which should be explained to the employee regarding the termination of the contractual act (Sachs,
2008).
Termination of employment clause confirms that the employee will be paid as a replacement
for any accrued holiday and conversely, that a repayment will be made by the employee against the
additional holiday taken over above the entitlement (Changing terms and conditions and
redundancies in an economic downturn, 2012). There is a common difference between common law
and civilian system to the formation of employment contract laws. From the past research studies, it
is clear that employers should give careful thought to the reasons for the change especially at the
time when employers are making changes in the contractual provisions. The contract of
employment must have to include a specific set of models so that every aspect related to the
employment can be clearly mentioned. This is because an employee must complete certain
minimum periods of continuous employment with an employer to be eligible for certain rights and
payments such as unfair dismissal, statutory redundancy and other requisite pay. The parties entered
in the employment contract are free to agree several express terms and conditions as per their
wishes and requirements. The law states that the parties have to reach consensus ad idem where in
an agreed bargain has been concluded among all the concerned contractual parties. There are
various contracts of employment that includes their own internal mechanism to make changes in
variation clauses and this may permit the employer to amend the terms and conditions of
employment contract unilaterally (Blanpain, and et.al., 2007).
As per the case of Bateman v Asda Stores the tribunal held that this wording permitted Asda
should impose the new regime on its employees without acquiring their consent. Supporting the
same aspect, the claimant appealed contending that Asda could not rely on the conditions in the
staff handbook to justify if the new regimes are required without consenting the employees. Hence,
as a result, the employee appeal was dismissed and EAT found that there was nothing that could
obtain further consent of the claimants (Befort, 2001). The EAT has also analyzed that nothing was
there in the relevant background to the contract that could show the intention for the variation
provisions which is being contended by Asda. No proof has been found out before the tribunal
shows the response for this course and it also fails to depict that the parties did not intend for the
variation provision to have that effect which have been contended by Asda. The decision in
Bateman supports the proposition that a contractual right (which is of varying nature) may be
trusted to introduce many changes in the contracts among the entire workforce (Bateman and others
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v Asda Stores Ltd, 2010).
Contradicting the fact, the decision has been subjected to academic criticism where in
authors have argued the EAT's interpretation about the variation clause. Nonetheless, in the absence
of the variation clause, a change in terms and conditions requires the consent of employees and
agreement may be reached expressly or impliedly by acceptance of concerned parties. The
employer can decide to introduce changes in the contracts without expressing things to all the
employees and if the employee continues to work under the new terms, it means that employee has
given the consent to work with the changed structure (Barnard, 2012). Relying on the consent by
agreement, there is a risky strategy for the employer in which the court of tribunal can decide if the
change can be accepted properly by the employee. Furthermore, the new terms have removed all the
rights to a performance related bonus and imposed restrictive covenants. In the absence of protest,
the employee can get ready to give notice for change as per the inferred consent for the change. In
the case, where the variation has less immediate effect, employee can continue to the work which is
not necessary to signify the acquired consent for the change (Araki, 2002).
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