A recent decision of the Employment Appeal Tribunal has suggested that an express right to vary contractual terms in an employee handbook can be relied upon by the employer. However, this decision should be treated with caution.
Employment solicitor Sasha Lormant comments.
In the case of Bateman and others v Asda Stores Ltd, the EAT has considered the extent to which the employer could rely upon an express right to vary contractual terms in order to introduce new pay terms, without obtaining the affected employees’ express consent.
Asda wanted to move approximately 18,000 employees who were working under an old pay structure, to a new pay structure under which the majority of its store staff worked. Asda relied upon express wording in the staff handbook which reserved the right to review and amend the handbook, some sections of which formed part of the employees’ contracts of employment.
Following consultation with the employees, over half agreed to voluntarily transfer. The remaining employees were transferred to the new regime without their express consent, in reliance on the wording in the handbook.
700 employees brought claims against Asda claiming unauthorised deductions from wages, breach of contract and unfair dismissal. The six test cases considered by the employment tribunal were dismissed. The tribunal held that the wording in the handbook allowed Asda to impose the new pay system on the employees without obtaining their express consent.
The EAT has dismissed the employees’ appeal. The EAT was satisfied that the wording of the variation clause was “clear and unambiguous”, and entitled Asda to unilaterally change the contents of the handbook. It rejected an argument that Asda was in breach of the duty of trust and confidence towards its employees, since the employees had expressly conceded at the tribunal hearing that there was no issue in relation to a breach of trust and confidence.
Comment
It is important to note that in this case, the employer had consulted with employees prior to making the change, and that the majority of employees did not claim to have suffered any financial loss as a result of the change. It is possible the tribunal would have decided the case differently if the change had resulted in a material detriment to the employees. However, the case is a useful one for employers who seek to make minor changes in reliance on an express variation clause, provided the wording is clear and unambiguous.
A copy of the EAT decision is available here