Acumen News & Events

17 May 2010

Is the contractual wording in your staff handbook clear and unambiguous?

Can employers enforce variation clauses?

In the case of Bateman and Others v Asda Stores Limited, Asda carried out a review of its pay structures which involved transferring 18,000 of their staff from an old pay structure to a new regime.

After a consultation period, the majority of Asda's staff voluntarily moved to the new regime but some 8,700 staff refused. Asda made the decision to transfer these staff to the new regime without their consent and relied on a clause in the employee handbook (some sections of which, including pay, formed part of the employees contract of employment) which stated that Asda "reserved the right to review, revise, amend or replace the contents of this handbook from time to time reflecting the changing needs of the business..."

Approximately 700 staff brought claims in the Employment Tribunal alleging among other things, unlawful deductions from wages and breach of contract, with six claims treated as test cases. The Employment Tribunal held that the wording in the handbook allowed Asda to make the changes without consent.

The employees appealed to the Employment Appeals Tribunal and they agreed with the Employment Tribunal's decision stating that, whilst consent would usually be required, this was not necessary where there was a "clear and unambiguous" right to vary the contracts unilaterally.

It should be noted that the employees were not allowed to bring a new argument that the change to terms and conditions relating to pay amounted to a breach of the duty and trust and confidence owed by an employer to an employee as they had not raised this at the Employment Tribunal.

If an employer wishes to rely on this case, then they must ensure that their own contractual wording is "clear and unambiguous." Care should also be taken not to breach the duty of trust and confidence in the process of implementing such a change, and employers should ensure that adequate consultation takes place.
Asda were in a better position as they had consulted widely about the change and the fact that they had taken steps to ensure that no employees would suffer a pay reduction as a result of the change.

Is your Company thinking of making change to the Terms and Conditions of your employees? Call us today to find out what your obligations are on 01244 357 211.