My employer wants to change my terms regarding pay
I work in events in a large restaurant in London. I originally started in this restaurant on a fixed salary, although my manager still always paid me for any over time worked. We then had a change to our terms which everone on my team accepted. This involved our yearly salary being devided by 52 weeks and then 40 hours to give us our hourly rate. We are now contracted to work for a specific hourly rate instead. Human resources are now threatening further changes. They want to change the terms regarding pay so that we have a measily hourly rate guaranteed by the restaurant's house pay, they will then make up the remainder of our hourly rate with the restaurant's tronc scheme (the pool of tips and service charge each month). This in effect means that if the restaurant is not performing well, the tronc might not be sufficient enough to make up our hourly rate to what our current contracts say. Can I refuse to sign the new contract? Is my employer legally allowed to change my contract in such a way that it affects my pay and that it might mean I get paid less per hour for the same job I have done for more than a year? Please help as this is causing sleepless nights at the moment! Thanks Johann
Unfortunately the answer is yes and no! Your employer cannot simply change your contract of employment. They have to give you a period of "notice" and consider your (and your fellow employees) comments on the proposed changes. However, after that they can introduce the change and there is little you can do about it. They can reduce your basic wage in this way, and they can use the tronc system to top up wages - even if the "basic wage" is less than the national minimum wage, as long as the "top up" takes you over it, which I think is iniquitous! You have the right to refuse to accept a change in your contract, but your employer can then dismiss you, and if they can demonstrate that the change was for good business reasons it may not be considered unfair. You can claim constructive dismissal if you resign rather than agree to the new contract, but the same problem applies. The business you are in is notorious for this type of thing, and there really isn't much you can do, even if you are in a union, which I assume you aren't. If you can't afford unemployment and the dicey chances around dismissal/resignation, then it would seem like your best option is to hang fire until they make the change, accept it if you have to, but start looking for another job yesterday!
Thank you for your reply - but I am still confused! My hourly rate at the moment is written in black on white in my contract and I have been on it for pretty much a year now.
The proposed changes might mean that during less busy times I might earn less than the amount currently stipulated in my contract. I have so far been guaranteed a certain amount per hour, no matter how busy or quiet the restaurant is. I have been trying to find some info on the DirectGov website regarding changes to your terms regarding pay in your contract and it is not too clear - but what I can make of it so far is that a paycut or demotion can only be authorised after a disciplinery. Surely that means that new terms which might mean a paycut does not have to be legally accepted by me if I have not had a disciplinery?
That's what I meant by yes and no! Basically, what your employer will be doing is offering you a new contract. So it's not a cut in pay. It's a new contract. The fact that there is less pay in the new contract isn't the issue. I know it is for you, but that isn't how the law looks at it. The law says that your employer can offer you a new contract provided they have given you a months notice. You have every right to reject the new contract - you can refuse to sign it. However, and this is the catch, by doing so you are effectively resigning. On the day that the new contract comes into force, if you turn up to work, you are accepting the new contract - if you don't turn up, you resigned! You don't get to turn up to work and stay on your old contract. If your employer says to you, "on October 1st this is your contract, take it or leave it" and has given you the required months notice of the change, your presence in the workplace on 1st October is a legal acceptance of the contract.
If you refuse to accept the contract you can resign or be sacked. Whether this is fair or not then comes down to what your employer claims as their defence, but you need to be aware that these sorts of situations come down to that old "some other substantial reason" clause. So, for example, your employer tells the tribunal that the business wasn't making enough money to guarantee the existing wage levels, and that it was in their business interests and in order to maintain the jobs that they were forced to make a change in the way pay was calculated.... Do you see my point? They will have some form of "good reason" to do what they are doing, and they will produce that as evidence that they had no choice and all they were trying to do was to ensure they didn't have to close and make everyone redundant.
And what will make your case weaker - and I am laying bets here - is that your colleagues at work will moan and whitter, but they will accept the changes and won't back you up. So it will become a case of "everyone else saw that we had no choice except this one troublemaker". As a seasoned "troublemaker" I have seen this often, and most of all in the sort of work you do - anything in the entertainment sector. Staff are notoriously badly done to, but the last thing they ever think of is unionising! Which is why they continue to be notoriously badly done to. Because what I have told you applies to all employees, but for a variety of reasons such as workforce strength, morale, unions etc., a lot of employers wouldn't dream of trying it as they know it would destroy their business. But that isn't true of all sectors of employment, and that's your problem - you are in a weak sector, where most people shut up and buckle under, and where employers think (and are usually right) that there are 20 people as good as you out there who will kill to get your job, so why should they care? I doubt I have to tell you that any employer who cared a fig about their staff wouldn't do this - or at least, if they absolutely had to you would know what the simply "good reason" was already and understand why.
I hope this makes it clearer. I know it doesn't help much. Sorry about that, but I don't make the laws (much as I would like to!) - all any of us can do here is try to help you look at options. And your only other one is all out strike action that brings your employers to their knees, and I guess if that was even remotely possible you wouldn't be writing posts on the board!
Thank you very much for your help I really do appreciate it
shikahra I am in the exact same position. My employers are considering terminating our original agreement as i have not accepted the new terms and conditions. I also am the only one within the section to not agree. Notice I stated section. There is approximatley 200 employees in the company and only 30 within the manufacturing section within which i work. As it is leagally allowed have i not got a chance in an employment tribunal on the basis of unfairness as the company is claiming to implement these changes so as to prevent further job losses when only a small amount of the employees are being subjected to it.
It entirely depends on the circumstances and the changes. Such a change - done properly - is often fair in law, but there can be cases where it isn't. But if the company can demonstrate that there is a sound business case, especially if it avoids job losses and if everyone else has agreed to it - then yes, it could be considered fair in law. Tribunals are generally tending to support employers in these circumstances. But it does depend on the details and you haven't told us any!