Source: theHRDIRECTOR
Date: May 2006
Author: Deborah Hely, Partner in the Employment Team, Beachcroft Wansboroughs

An employee’s duties and responsibilities are part of the contract of employment, which is a legally binding document. However, as a business changes and evolves, it is often necessary to change working conditions and practices and, therefore, contractual terms relating to issues such as pay, hours or job function. Deborah Hely, a partner in the employment team at beachcroft wansbroughs, looks at how to approach a potentially difficult and complicated situation.

Any contractual changes will not be binding unless the employee agrees to them, and where an employer wishes to enforce change and the employee does not agree, it is necessary for the existing contract to be terminated and a new one offered. This involves a dismissal and, in order to avoid the risks of an unfair dismissal claim, many employers include an express flexibility clause in a contract which gives the  employer the right to make a particular change.

Where a change is authorised by the contract there is, strictly speaking, no contractual variation and the employer can impose that change, but it is essential that any changes required by a flexibility clause are specifically defined and provided for in the contract.  it was interesting to see, only very recently, the tribunal’s narrow view of what is permitted within a contractual flexibility clause, when an employer tried to change an employee’s role. The employee worked as an architect and her contract of employment stated that she couldbe required to perform the duties of her post – and any other duties reasonably required of her. The employer decided to change her role and she was given a managerial post, but the creative part of her role was removed. The employer said that this change was permitted by the flexibility clause, but the employee said that the change was so fundamental that her old job was redundant and she had been offered a different job.

“the clause could not give the employer carte blanche”

The tribunal decided that the clause did not entitle the employer to alter the content of her work so substantially as to completely change its nature. It said that the clause could not give the employer carte blanche to require her to perform any duties it wished her to do, because the obligation was subject to an express requirement of reasonableness. The tribunal concluded that the employee could not possibly have thought, when she signed the contract, that she was agreeing that the employer could make changes to her role in this way. It was, in the tribunal’s view, irrelevant that the employer had valid, commercial grounds to make the change.

Whether it was reasonable or not to require the employee to change her role should be measured on what would be reasonable to her, because the contractual clause was specific to her. That is not to say that the employer was not permitted to make the change at all, but the point here is that the clause in the contract did not permit a fundamental change such as the one required. The reality was that the employer needed fewer individuals to undertake a creative role and, therefore, it should have treated this as a redundancy situation.

What does an employer have to show if it wishes to rely on a flexibility clause to change an individual’s job function? The case mentioned here demonstrates that a clause requiring an individual to undertake “any duties which may reasonably be required“ may – on the face of it – appear to allow the employer a very widediscretion to make a change, but will in fact be restricted.

“job descriptions are not prescriptive documents”

The clause does not permit a change that alters the fundamental nature of the role and it is necessary to examine the factual circumstances very carefully. The job description has some relevance but, typically, job descriptions are not prescriptive documents. They frequently fail to represent accurately or fully the actual duties undertaken by an employee and the duties are often described in vague terms so that, when interpreting them, a tribunal is required to examine how these duties operate in practice, including the actual work undertaken.

Consequently, if an employer wishes to remove or change significant parts of an employee’s duty whilst other less important aspects remain, this is unlikely to be covered by such a general clause in a contract of employment. If an employer wishes to make changes to an employee’s role, it is essential that they think about the following steps first:

• Establish whether there is an express contractual term that permits a change to be made. Any contractual clause must be sufficiently defined to cover the specific changes that the employer wants to make. In addition, the employer must also be able to show that the contractual term has been agreed by the employee and that the employee understood the effect of the clause at the time that the contract was entered into.
• If the change is covered, the employer may impose the change, but should discuss the issue with employees before enforcing the change. Employers are not obliged to operate flexibility clauses in a reasonable manner. However, there is an obligation not to act in a way that will undermine mutual trust and confidence, and this may restrict the way in which a flexibility clause can be operated.
  For example, consider giving employees notice of any change, to allow them to make any appropriate adjustments in relation to travel arrangements or, perhaps, childcare responsibilities.
• Consider the possibility of a discrimination claim, e.g. could there be a claim for indirect sex discrimination because the change impacts disproportionately on women, or for disability discrimination because the changes are difficult to accommodate because of an illness? If there is no express right to vary the contract and the employee refuses to agree to a proposed change, the employer may decide to terminate the old contract and offer the employee a new one. This must be done with consultation and the employer must show that it had sound business reasons for the termination.

In deciding whether it is ‘reasonable’, the tribunal will consider the following:

• Whether the disadvantages which the employee would suffer as a result of the change are considered
• Whether these disadvantages outweigh the advantages to the employer in implementing the changes 
• Whether genuine consultation took place
• Whether the employer responded reasonably to the employee’s objections
• Whether the majority of the employees accepted the changes
• Whether a trade union recommended the changes
• Whether alternative jobs or locations were considered.

Once an employer has looked at these guidelines, if the change is not covered by a contractual clause and involves a diminution in the requirement for employees to carry out work of a particular kind, this should be treated as a redundancy situation.