Staff Handbook Allowed Contract Changes

The terms of an employment contract usually cannot be changed or varied without the consent of both parties (employer and employee), so an employer will often include policy statements in a non-contractual staff handbook, the terms of which it can change or update at will.

However, in the recent case of Bateman v Asda Stores Ltd, the EAT decided that the wording of the relevant staff handbook enabled the employer to make changes to contractual pay and work regimes without obtaining consent from affected employees.

The staff handbook was expressly stated to be included in 'your main terms and conditions of employment' but it also gave the employer the unilateral right 'to review, revise, amend or replace the content of this handbook ... from time to time'.

The employer used this mechanism to alter the pay structure for thousands of employees. The claimants argued that, legally, this could not be done without their consent. However, the EAT disagreed.

The EAT held that the wording of the handbook was quite clear. There was no evidence that the employer had acted unreasonably – it had consulted with employees over a long period over the proposed changes – so it could not be said that the employer was in breach of its implied duty of trust and confidence, which might have been the case had it tried to impose change arbitrarily or capriciously.

There was also no evidence in this case (though there might well be in others) that the employees would never have expected that it could be in the employer's power to be able to change their hours or their pay without their consent.

Looking at the wording of the handbook in the context of the surrounding circumstances (as the courts and tribunals will always do when deciding what any contract actually means), it was open to the employer to act as it had.

Point to note –

  • Although this case was decided very much on its facts, it is very useful to have a decision of the EAT that suggests that it is worth an employer's while to put careful thought into the wording of its employee documentation and the relationship between its individual employee contracts and any staff handbook. In appropriate circumstances, by linking the two together, the employer may be able to give itself more flexibility to change contractual terms in order to meet changing business circumstances or even changes in the law. We shall be happy to advise further.

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