Decision to continue working following a variation of contract doesn't always amount to agreement


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The Court of Appeal has held in Abrahall and ors v Nottingham City Council and anor that continuing to work (in this case for two years) following the imposition of a contractual pay-cut will not always be treated as constituting an acceptance of those terms.

Previously it was thought that an employee's decision to continue working following changes to terms and conditions would be taken as a deemed acceptance of these new terms. It seems, following Abrahall, that this will no longer be the case.

The Council decided to impose a two-year pay freeze in March 2011. The trade unions opposed this proposal, threatening industrial action and the Council asserted that the alternative was a large number of compulsory redundancies. The freeze was implemented in April 2011, and though the union consulted members about taking industrial action the turnout was not high enough to justify a formal ballot. The Council imposed a similar freeze in April 2013 and several hundred affected employees brought claims for unlawful deductions arguing that they had a contractual entitlement to incremental pay increases.

The Court of Appeal held that all the claimants were contractually entitled to the pay increases, and that they had not implicitly agreed to a variation of contract. It was not the case that continuing to work following a contractual pay cut can never constitute acceptance, but nor will it always be treated as acceptance. The proposed variation was wholly disadvantageous to the employees, and the matter was not put to them as something to which their agreement was required. There was also the "strenuous protest" on the part of the unions, up to and beyond the date of the freeze, with the Court concluding that, "A decision not to take industrial action is not the same as a decision to accept a variation".

Take note: In determining whether continuing to work following a contractual pay rise will be treated as acceptance a tribunal will have to look at the employee's conduct in continuing to work and whether it is reasonably capable of a different explanation (i.e. is not because they have consented to the change). The tribunal will also have to look at whether protest or objection at a collective level will be sufficient to negative any inference of acceptance. Finally, there is the issue of when an employee may be taken to have accepted the change, and identifying precisely when the point has been met (the Court recognised this as raising "a point of some difficulty").

In Abrahall the employees were not given the scope to made individual decisions about the changes as everything was conducted at a collective level. Following the decision in this case it is no longer sufficient to assume that an employee who has continued to work for some duration of time after the changes have been imposed is therefore deemed to have consented to those changes.

This article is taken from HR Law - May 2018.

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