An employer may be entitled to make unilateral changes to a contract of employment where the contract gives the express right to do so.
Asda wanted to ensure that their entire store staff were employed on the same pay and work structure. This meant that staff employed under an old pay and structure regime had to transfer to a new regime. 9,330 employees agreed to the changes but 8,700 did not. The new regime was imposed on them and about 700 employees brought claims against the company for unauthorized deductions from wages, breach of contract and in some cases unfair dismissal.
Asda argued that they were entitled to impose the new conditions because the staff handbook stated that the employer: "reserved the right to review, revise, amend or replace the contents of this handbook, and introduce new policies from time to time reflecting the changing needs of the business...". The handbook also provided details of pay and other conditions of employment.
At first instance the Employment Tribunal found that the conditions in the staff handbook were incorporated into the Claimants' contracts of employment and that these conditions permitted Asda to impose the new regime on its employees without obtaining their consent. The Claimants appealed, contending that Asda could not rely on the wording in the staff handbook to justify imposing the new regime and that Asda needed the agreement of each employee to impose the changes.
The Employment Appeal Tribunal (Ms D Bateman & Others v Asda Stores Limited UKEAT/0221/09) held that the staff handbook did permit Asda to make the changes to the pay and work regime without obtaining further consent from the Claimants. The wording in the staff handbook was wide enough to permit Asda to change matters set out in the handbook, which included the pay and work structure. The result was that Asda were entitled to impose the changes in the pay and work provisions without the need to obtain express consent from the employees affected.
This case is particularly interesting as, historically, the assumption has been that widely drafted wording permitting employers to make unilateral changes to terms and conditions of employment would be ineffective. On the basis of this case it would be worth employers reviewing their terms and conditions and potentially inserting wording into their precedent contracts of employment and their handbook (if it contains contractual terms) expressing the employer's right to amend. The EAT did stress that an employer would still have to behave reasonably, not capriciously or arbitrarily. In this case Asda had undertaken an extensive consultation exercise about the changes, they had given the employees several months' warning of the changes and had sought to ensure that, overall, each individual would not be impacted financially.