Contracts often state that any changes must be made in writing and agreed by all the parties. These kinds of clauses are often included in employment contracts. However, there have been conflicting decisions on whether they actually work.
In Globe Motors Inc v TRW Lucas Variety Electric Steering Ltd the Court of Appeal recently commented that they do not. Even with such a clause included, it is still possible to amend a contract verbally or even by conduct. This means an employer cannot rely on such a clause in an employment contract to argue that an alleged change has not been agreed with an employee. This will make arguments over agreed contractual terms more likely and the judge accepted that it may cause evidential problems. However, an oral variation will only be found where it can be proven to have been agreed on the balance of probabilities.
Despite this decision, we still recommend that employers include such a clause in their employment contracts. This encourages good practice and may pre-empt allegations from employees that changes have been made. Employers should also remember to document agreed changes to contracts clearly and retain signed copies on an employee's personnel file.
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