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Changes to contracts of employment – varying Staff Handbook provisions

06 March 2015

In one of a recent string of cases on variations to terms of employment the High Court has held in Sparks & another –v- Department for Transport that terms contained in a Staff Handbook providing a “trigger point” of days of absences above which an official absence management process could be initiated, were contractual and could not be unilaterally altered to the detriment of the employees. (See also Hart –v- St Mary’s School (Colchester) Ltd )

In July 2012, following unsuccessful negotiations, the employer informed its staff trade unions that it would be imposing a new standardised attendance management procedure. Under the newly proposed procedure, after the "first trigger point" of five days or three occasions of absence within a rolling 12 month period, an informal review meeting would be held. The procedure would then become formal after the "second trigger point", and could ultimately lead to dismissal.

The employer relied on an existing variation provision in the Handbook which in effect provided that before the employer could make any changes to its employees’ contracts, it would first have to consult with the unions with a view to reaching agreement and only then, if that procedure failed, could unilateral changes be made, provided they were not detrimental to the employees.

Agreement could not be reached and the employer unilaterally imposed the new absences trigger thresholds.

The employees sued alleging breach of contract and asked the Court to declare that:

  • the terms of their contracts included the previous Handbook procedure;
  • the new Handbook procedure could not vary the previous procedure and was not contractually binding; and
  • the employer had committed an anticipatory breach of contract in imposing the new procedures.

The Court found in favour of the employees and declared accordingly. The previously existing terms were reinstated.

David Ludlow
Partner - Employment