Change to contractual terms

Q. Our employer has told us that from 2005 we will no longer receive company sick pay - we will only get Statutory Sick Pay. Our contract says we will be paid up to four weeks' sick pay. Can our employer change this without our agreement - and if so, how much notice do they have to give?

A. All changes to contractual terms should be agreed with the employee, unless there is something in the contract that allows the employer to vary the terms. If changes are imposed without agreement, this amounts to a unilateral variation of contract and is unenforceable. The legal remedy for this would be through the county court; employment tribunals can only deal with breach of contract claims after a dismissal.

If the employer brings in a substantial change to the contractual terms, this could amount to a fundamental breach of contract and give rise to a claim of constructive dismissal (or unfair dismissal if one contract is ended and the employee is re-engaged under a different contract).

An employment tribunal would decide whether the breach is a fundamental one. However, in Cantor Fitzgerald v Callaghan, the Court of Appeal said that a unilateral cut in pay is normally a fundamental breach of contract. As sick pay is part of wages, the change you describe may well be viewed as a fundamental breach.

Cantor Fitzgerald v Callaghan & Ors [1999] IRLR 234