Forced change of contract with reduced benefits

[Ted71]

Hello

 

My employer, lets call them ExampleCo, has decided to revise everybodies contracts to align them. The company has grown by acquisitions, so previously people had some variation in their contracts historically. I work in a department which requires work out of hours on a fairly frequent but adhoc basis, typically 10-20 hours per month.

 

My current contract states "Where you are required to work beyond your normal office hours in order to perform system changes, premises relocation and other 'down time' activities, subject to prior agreement from your line manager, you will be paid overtime at a rate of 1.5 times your basic hourly rate."

 

The new contract does not have this clause, but instead says "You are not entitled to additional remuneration for hours worked in excess of your normal hours."

 

This seems clearly to be to my detriment. The very nature of my job is that work out-of-hours is necessary, so in essence they are saying i cannot do my job (as i will be unable to achieve deadlines etc without doing that work, which can only be done out of hours).

 

All overtime is currently voluntary - i could very easily be 'busy' every evening/weekend and unable to do the out-of-hours work, however in my time with the company i have put evening/weekend work first all except for one weekend (where i gave 4 weeks notice that i would be unavailable to work then). Obviously if OT payments stopped i would be very unlikely to work evenings/weekends, but as above that would mean i'd no longer be able to do my job properly.

 

I have raised this omission to my superiors (Dept head, who reports directly to the board so is quite senior in position. The people in position between myself and them are also aware), and his response (verbally) was "don't worry about that. it will still be paid".

 

Now understandably i'm not inclined to sign the new contract on the basis of a verbal 'it will be okay' speech!

 

Included in the envelope with the new contract is a Q&A from HR regarding the contract changes.

One of the Q's covers 'what if i decide not to sign the new contract', which essentially says that after a period of consultation they will terminate my contract (redundancy?) then look to re-hire me under the new contract.

- this seems a bit iffy, but i believe this part is legal.

 

...then it goes on to say "All employees will have their salary reviewed (both those that sign and do not sign the new Contract). However, awarding salary increases following the review is discretionary. Only those employees that have signed ExampleCo's refreshed Contract will benefit from the next round of discretionary salary increases."

- so in other words, if i don't sign the new one, no pay rise. This seems very dodgy and 'bully-like'. Is this allowed?

 

Finally, pay reviews are on an annual basis, the last been Sept 2010 (actual pay increase was a nominal amount, as expected in the current climate). They have said the Sept 2011 review will be postponed until February, to generate cost savings (by not paying the increased salaries for 4 months). Doesn't this mean they are breaking their 'annual basis'

 

So, three issues/questions.

1) Can they remove the contractual element of paid overtime? My concern is that if this becomes a verbal gentlemans agreement instead, it will then erode (e.g. reduce from 1.5x to 1x, or time-in-lieu, etc) or be conveniently phased out/forgotten (the Dept head already has a selective memory about some things!).

 

2) Can they explicitly link chance of pay increase come review time, to whether we sign or not?

 

3) Are they breaking their annual pay review clause? (They have stated this clause in the aforementioned Q&A, describing it as a 'contractual obligation', however i cannot find mentioned of it in my current contract, other than "periodically").

 

 

Don't get me wrong, I enjoy my job and would like to keep a good relationship with my employer. However i also value the 1.5x OT payment, which equates to around 3-4k per annum to me. And the aggressive wording of their Q&A has wound me up.

- Worst case, if they won't see sense, what are my options?

 

 

Many thanks

Ted

[Sidewinder]

Hi Ted - let's try to deal with the points one by one.

 

Hello

 

My employer, lets call them ExampleCo, has decided to revise everybodies contracts to align them. The company has grown by acquisitions, so previously people had some variation in their contracts historically. I work in a department which requires work out of hours on a fairly frequent but adhoc basis, typically 10-20 hours per month.

Were you one of the staff 'acquired' and therefore on any sort of contract from a previous employer where TUPE might have been involved? If so, how long ago was this?

 

My current contract states "Where you are required to work beyond your normal office hours in order to perform system changes, premises relocation and other 'down time' activities, subject to prior agreement from your line manager, you will be paid overtime at a rate of 1.5 times your basic hourly rate."

 

The new contract does not have this clause, but instead says "You are not entitled to additional remuneration for hours worked in excess of your normal hours."

 

This seems clearly to be to my detriment. The very nature of my job is that work out-of-hours is necessary, so in essence they are saying i cannot do my job (as i will be unable to achieve deadlines etc without doing that work, which can only be done out of hours).

 

All overtime is currently voluntary - i could very easily be 'busy' every evening/weekend and unable to do the out-of-hours work, however in my time with the company i have put evening/weekend work first all except for one weekend (where i gave 4 weeks notice that i would be unavailable to work then). Obviously if OT payments stopped i would be very unlikely to work evenings/weekends, but as above that would mean i'd no longer be able to do my job properly.

 

I have raised this omission to my superiors (Dept head, who reports directly to the board so is quite senior in position. The people in position between myself and them are also aware), and his response (verbally) was "don't worry about that. it will still be paid".

I would strongly suggest that you ask questions in writing, and expect to receive responses the same way. Verbal agreements, whilst binding have a habit of being nigh on impossible to prove!

 

Now understandably i'm not inclined to sign the new contract on the basis of a verbal 'it will be okay' speech!

Nor should you - please see the point made above. You need to inform the employer that whilst you understand from your manager that you will still be paid the current rates for overtime, you are concerned that this may not be honoured, and as it forms a significant part of your salary, on which you rely every month, you would appreciate a written assurance on that point.

 

Included in the envelope with the new contract is a Q&A from HR regarding the contract changes.

One of the Q's covers 'what if i decide not to sign the new contract', which essentially says that after a period of consultation they will terminate my contract (redundancy?) then look to re-hire me under the new contract.

- this seems a bit iffy, but i believe this part is legal.

It is indeed. A contract cannot be varied without agreement, but it can be lawfully terminated providing that you are re-engaged on the new terms (thereby losing all length of service entitlements). You can then refuse the new terms and try to make a case for to take to a Tribunal, but any success would depend on whether the contract was lawfully terminated, and how reasonable the employer's actions were. In the current climate they would have significant leeway where there is a need to rationalise and save money.

 

...then it goes on to say "All employees will have their salary reviewed (both those that sign and do not sign the new Contract). However, awarding salary increases following the review is discretionary. Only those employees that have signed ExampleCo's refreshed Contract will benefit from the next round of discretionary salary increases."

- so in other words, if i don't sign the new one, no pay rise. This seems very dodgy and 'bully-like'. Is this allowed?

 

Finally, pay reviews are on an annual basis, the last been Sept 2010 (actual pay increase was a nominal amount, as expected in the current climate). They have said the Sept 2011 review will be postponed until February, to generate cost savings (by not paying the increased salaries for 4 months). Doesn't this mean they are breaking their 'annual basis'

Probably depends on the precise wording of the contract, but generally, providing that notice is given of the postponement, they would be in order to do this. My own employer recently did the same!

So, three issues/questions.

1) Can they remove the contractual element of paid overtime? My concern is that if this becomes a verbal gentlemans agreement instead, it will then erode (e.g. reduce from 1.5x to 1x, or time-in-lieu, etc) or be conveniently phased out/forgotten (the Dept head already has a selective memory about some things!).

Hence why you need, ideally a written assurance, otherwise you might be able to claim Custom and Practice, so would need to hit them with a grievance for an Unlawful Deduction on the first occasion that you weren't paid the agreed rate. Ultimately though, they could phase out overtime payments providing that notice is given and if refused, the contract terminated as detailed above.

 

2) Can they explicitly link chance of pay increase come review time, to whether we sign or not?

Yes. You can hold out and refuse to agree, but they could force the issue. Whether they would or not might depend on how many of you put up a stand.

 

3) Are they breaking their annual pay review clause? (They have stated this clause in the aforementioned Q&A, describing it as a 'contractual obligation', however i cannot find mentioned of it in my current contract, other than "periodically").

Periodically would probably be sufficiently vague to allow them to vary the time that any pay award is given, or even to not increase pay at all. Once again, you might be able to argue C&P but you have to ask, as with the other points, where it would lead?

 

 

Don't get me wrong, I enjoy my job and would like to keep a good relationship with my employer. However i also value the 1.5x OT payment, which equates to around 3-4k per annum to me. And the aggressive wording of their Q&A has wound me up.

Then you need to ask a series of questions, or seek a meeting and put your side of the argument. This is your livelihood, and whilst the employer may need to make savings (thereby keeping you in work), they also rely on their happy and contented staff to take the business forward. Compromise may be necessary.

 

- Worst case, if they won't see sense, what are my options?

Very few if they really really want to do this. You could look at taking action for breaches of contract or Unlawful Deductions, should either scenario occur, but this would inevitably lead to a breakdown in the relationship, even if you were successful, so try and deal with the problem through negotiation rather than threats. You may well not like the aggressive nature, but they would probably argue that they are trying to run the business at a profit in difficult times.

 

 

Many thanks

Ted

[Ted71]

Hi Sidewinder. Thanks for the quick and detailed response.

 

I'll try to keep this short, so will reply in a block rather than in-line...

 

I work for the 'parent/group' company, so TUPE does not apply. (the acquisitions over the years also work for the parent company directly since the date they were acquired - there are no 'child/sister' companies in the group)

 

I absolutely agree/understand that the agreement that OT will continue to be applicable needs to be in writing, not just verbal. I will formally ask for clarification on that clause (that it has changed from 'you will get 1.5x remuneration' to 'you will not get remuneration').

 

If they reply (e.g by email) and say that overtime will continue to be paid, does this override the clause in the contract, or does the contract take precedence (ie their email is no better than a verbal agreement?)...should i be asking for that particular clause in the new contract to be updated?

 

The entire department is in the same boat regarding overtime, and all have said that they are also not inclined to sign the new contract until that part is updated, so maybe we have strength in numbers...but on the whole i do get the impression this is a change they can force through if/when they like, and there is little we can do about it other than let them know we're unhappy with it through the appropriate meetings.

 

Thanks again for the advice - i was awake for hours last night thinking about all this

 

Ted

Edited August 5, 2011 by Ted71
typos

[postggj]

has the majority of staff acepted this new contract, or are you still holding out

[Sidewinder]

Hi Ted

 

As I said before, an agreement need not be in writing to be binding, but verbal assurances tend to be harder to prove, so an email would be every bit as good as a written contract in the event of a dispute.

[Ted71]

Hello again.

 

Postggj, as far as i know nobody on the team have signed the new contract yet - however we only received it on Thusday (4th). We have been asked to return them by the 19th, as they are looking to complete the process by the end of the month (the next contracts are dated 1st Sept).

 

Sidewinder, agreed. Verbal contracts are binding, but harder to verify at a later date.

 

I'm on annual leave for a few days, so i'll see if there has been any response re getting the OT 'will continue to be remunerated' in writing. I know i am not the only person on the team that have queried it.

 

Thanks again for the advice and support.