Varying terms and conditions of employmentFriday, February 25th, 2011
In a decision given on 14 January 2011 in the case Morgan v Network Europe Group Ltd, the London Employment Appeal Tribunal (EAT) ruled that, where an employee has been issued with new terms and conditions but no attention is drawn to a significant change, the employee is not deemed to have accepted the variation.
On starting employment with Network Europe in 2005, Mr Morgan was issued with and signed a statement of terms and conditions of employment. In 2008 he was issued with a new Handbook but did not sign a statement to the effect that he had read the Handbook and agreed to its terms. The employer did not draw his attention to an important change that allowed employees to be laid off without pay, other than statutory guarantee pay, and he did not know about the change.
During 2009, Mr Morgan was laid off for a period and received only a guarantee payment. He made a claim of unauthorised deduction from wages before an Employment Tribunal but it was dismissed on the grounds that, having been issued with the Handbook containing the variation, he had accepted the change because he had continued to work under the new terms and had accepted payment for doing so.
However, after reviewing earlier precedents, the EAT allowed Mr Morgan’s appeal. If Mr Morgan had signed the new terms and conditions of employment, there would have been an express contractual agreed variation. As he has not signed a second statement of terms and conditions and the change had not been drawn specifically to his attention, there was no express agreed variation. Network Europe had therefore made an unauthorised deduction from wages by not continuing to pay Mr Morgan during the lay-off period.
Where an employer issues a new statement of terms and conditions, it is important therefore that the attention of employees is drawn to the changes and they are asked to sign that they have received the document and that they agree to be bound by its provisions.