Can an employer unilaterally vary an employment agreement by relying on a variation clause within the contract?

Historically, such clauses have never been popular. If they are abused by the employer, then the relationship can start to look completely different to what the employee understood they were entering into. Famously, in the 1998 case of Wandsworth v. D’Silva, the Employment Appeal Tribunal queried whether, even with a variation clause, an employer would be able to make changes to the detriment of the employee.

To everyone’s surprise, the 2010 case of Bateman v. Asdastated that a company which “reserves the right to review, revise, amend or replace the content…” of a contract will be able to make unilateral variations. Employment judges have been pushing back against this judgment ever since. This year, three cases from the EAT and High Court remind us that, for an employer unilaterally to vary an employment agreement, it must have a crystal clear right to do so written into the contract. On each occasion, the judges held the wording of the variation clause was not sufficiently clear. It is to be remembered that:

  1. Even if a set of policies is said to be non-contractual, they are likely to be given contractual status if they give rights to the employee.  They can then only be amended if there is a variation clause in the contract.
  2. Any express variation clause has to be unambiguous.  Vague statements about notifying employees of changes etc are not sufficient. 
  3. Despite such an express clause, if the employer makes the changes without thorough consultation, it is likely to be in breach of the term of mutual trust and confidence.

If there is a particular clause that you wish to be flexible, for example, job title or place of work, ensure that wording within that clause itself is unambiguous and not just a general catch all at the end of the contract. Always try to seek consent before imposing a change.

Sparks v Department of Transport [2015] EWHC 181(QB)

Norman v National Audit Office UKEAT/0276/14/BA

Hart v St Mary’s School UKEAT/0305/14/DM