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Building Flexibility into the Employment Contract

Flexibility in Employment Contracts

The terms of the employment contract can only be varied with the consent of both parties. Hence, a variation cannot be imposed unilaterally. To do so can amount to a repudiation of the contract entitling the employee to resign and claim that he has been constructively dismissed.

It is important that you secure the agreement of the employees to any changes to the terms and conditions of employment.

Flexibility in Individual Clauses

Individual clauses in the employment contract may be drafted so as to allow you a certain degree of latitude or discretion should the need arise during the course of employment. Such flexibility may be needed in the event, for instance, of:

  • future requirements for changes in work practices;
  • retaining your discretion to substitute fringe benefits;
  • flexibility on the part of the employee as to hours, duties and place of work;
  • and the power to impose certain measures or sanctions such as precautionary suspension or the power of search.

Care must be taken, however, to ensure that a provision is not so widely drafted that it is void for uncertainty.

Any unilateral change would only be enforceable subject to the implied term that the company will not act in a way likely to damage the relationship of trust and confidence between employer and employee. Therefore, the efficiencies of such flexibility depends on what is reasonable in the circumstances.

Power to Vary

It is possible to introduce a clause in the employment contract which gives you a power to make changes to the contract should business circumstances dictate. However, it may still be possible for an employee to claim that the change is unreasonable and Employment Tribunal decisions suggest that the power to vary must cover specifically the element of employment in question e.g. change of hours, workplace etc.

You should also, even where you have such a right in the employment contract, be willing to consult with affected employees in order to prevent claims for constructive dismissal.

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