Labour Research June 2009

Law Queries

Reneging on pay

Q. Recently we agreed a pay deal. However the employer has now announced that it will renege on this. Is there anything we can do?

A. If the deal was validly concluded or acquired contractual status, then the employer should not be able to change its terms without breaching individuals’ contracts. A change to fundamental terms and conditions — anything to do with pay will always be considered so — should be the subject of a consultation.

Bringing in a change without consulting can entitle people to claim they’ve been constructively dismissed from their old post and rehired under a new contract. However this kind of argument may not be an attractive proposal for many.

The consequences of an employer unilaterally making such a change are that claims could be easily brought for an unlawful deduction of wages. Each pay day and not less than once a month, employees should register their objection with the employer to their reduced pay packet. If the employer does not relent, then tribunal claims will need to be lodged.