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Is my contract being breached?


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I have an annualised hours contract which is based on an average of 44 hours per week. Some weeks I am required to work more, some weeks less and hours worked over/under the 44 are credited/debtited to a running total. My contract clearly states that:-

 

'Your hourly rate of pay is as shown on your payslip and your weekly rate of pay will consist of an average payment of 44 hours'.

 

A couple of weeks ago, my company announced that due to a lack of work they were cutting everyones contract to 40 hours, and also their pay. They did not consult with us or give us any option. Nothing has been signed by us to agree to this reduction in pay and many of us are still working exactly the same hours as before.

 

We feel that the company have just used this as a cost-cutting exercise as they have reduced our wages by approximately 10% without necessarily reducing our hours of work.

 

Is what the company have done legal?

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On the face of what you have said - No

 

You have a contract which guarantees that you will earn a minimum amount of money. Any change to that contract has to be notified and agreed in writing by the employee or else the reduction is not only a breach of contract but an 'unlawful deduction' from your wages. If you do nothing then you will be deemed to have accepted the new contract, so if you really aren't prepared to accept the reduction (for example in the interests of remaining in employment and helping the company to survive) then you need to object to the change in writing. This is done in the form of a written grievance expressing concern that your wages have been cut without your agreement and with no change in your working hours and that this represents a breach of your contract and an unlawful deduction from your wages. The employer will then have to hold a meeting to discuss and hopefully resolve your grievance.

 

Ultimately, if there is no other option, the employer can force the change by writing to those concerned and giving notice of the intention to amend your contract of employment. If you object and no agreement can be reached, he may then give you notice that he intends to terminate your contract. This is perfectly legal providing that he offers you immediate re-employment on the new terms. If you refuse then you are deemed to have resigned, but may take action for constructive dismissal, however be aware that in those circumstances, damages are limited to actual losses incurred by the breach, which may be worthwhile for those cases which involve a reduction of thousands of pounds, but is not so viable for your average worker.

 

Tough choice, but your call.

Any advice given is done so on the assumption that recipients will also take professional advice where appropriate.

 

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