As an employer, there may be times when you need to make changes to your employees’ contracts of employment. Whether you are looking to update terms related to working hours, pay, job responsibilities, or benefits, it is essential to tread carefully to avoid legal pitfalls. Changes to employment contracts, if not handled properly, can lead to disputes, grievances, and even claims of constructive dismissal. Here’s a legal guide on how to go about making changes to employment contracts.

1. Understand the Legal Framework

Under UK employment law, an employment contract is an agreement between the employer and employee, outlining terms and conditions of employment. These terms can be written, verbal, or implied and are legally binding. The key point to remember is that employers cannot independently change an employee’s contract without their consent, unless the employment contract explicitly allows for such changes.

Changes to a contract can be made in a few ways:

Agreement between both parties: The most straightforward way to amend a contract is by mutual agreement.

Variation clauses: Some contracts include a “variation clause,” which may allow the employer to make certain changes without the employee’s express consent. However, these clauses must be clear and reasonable.

Implied variation: Over time, the nature of an employee’s work or working conditions may change in practice. However, for such changes to be legally binding, the change must be accepted and agreed upon, either verbally or through conduct.

2. Consultation and Communication

The first step when considering making changes to an employee’s contract is to communicate your intentions clearly. Even if the changes seem reasonable or are in line with business needs, you should consult with employees to discuss the proposed changes. This is especially crucial for significant alterations, such as changes to pay, working hours, or job duties.

Employers are legally required to provide employees with a written statement of changes within one month of a variation to terms and conditions. Depending on the nature of the change, you may be required to provide a formal contract update or a separate letter of variation.

3. Obtaining Consent

If the proposed changes are substantial, you will need to seek the employee’s consent. While it is often good practice to get this in writing, consent can also be implied in some situations (for example, if the employee continues to work under the new terms without objection). However, if an employee refuses to agree to the changes, you will need to assess your options carefully.

If consent is not given, an employer could face legal consequences, including:

Constructive dismissal: If an employer imposes significant changes without consent and the employee resigns, they may claim constructive dismissal.

Breach of contract: Unilateral changes to the terms of the contract could be deemed a breach of contract, leading to potential legal action for damages.

4. Consideration of Employee Rights

It is essential to take into account any employee protections before making changes.

For example: If the changes result in a reduction in pay or benefits, this may amount to a fundamental breach of the contract.

Changes that adversely affect an employee’s working hours or location might also be seen as unreasonable or disruptive, especially if these terms were negotiated when the contract was first signed.

If an employee is a protected group (e.g., on maternity leave or with long-term illness), special considerations or protections may apply.

5. Alternatives to Changing the Contract

If employees are unwilling to accept the changes, and a mutual agreement seems difficult to reach, consider alternative approaches:

Consulting via a works council or trade union: If there is a union or works council in place, engaging them in discussions about the changes could lead to a smoother process.

Redundancy: In extreme cases, if the changes are fundamental to the role, you may need to consider whether redundancy is an option, though this must be approached carefully, following appropriate consultation and providing redundancy payments where required.

6. Document Everything

Throughout the process, it is important to document all discussions and agreements in writing. Keep records of any consultation meetings, emails, or letters, as this could be essential if disputes arise later. If changes are agreed, ensure that these are clearly outlined in an updated contract or a written statement of employment particulars.

7. Special Considerations for Collective Agreements

If your business is governed by a collective agreement (for example, one negotiated with a trade union), any changes to the employment terms might require negotiation with the union representatives. This means that you could be subject to collective bargaining rules, and independent changes without consultation may not be legally permissible.

Communication and consent are key

Making changes to an employee’s contract should never be taken lightly. While businesses often need to adapt to changing circumstances, employers must ensure that any modifications comply with the law and respect employee rights. Open communication, obtaining consent, and following due processes are key steps to minimise the risk of legal complications.

If you are unsure about how to proceed or if you’re facing resistance from employees, it’s advisable to seek legal advice from an employment solicitor to guide you through the process. By handling contract changes correctly, you can protect both your business and your workforce, ensuring a positive and compliant working environment.

If you are an employer looking to amend employment contracts and need expert advice, please don’t hesitate to get in touch with us at Franklins Solicitors. We specialise in employment law and are here to help you with all legal aspects of managing your workforce.

You can contact Employment Law team here or on 01604 936512 / 01908 953674 or email info@franklins-sols.co.uk.

Two commonly misunderstood terms in employment law are Unfair Dismissal and Wrongful Dismissal, although they sound similar, they differ in their legal basis, focus and remedies.

Legal Basis

Unfair dismissal is governed by the Employment Rights Act 1966 and focuses on whether the employer’s decision to terminate the employee was justified and handled fairly. Employees are required to have a period of two years qualifying service in order to challenge their dismissal as unfair, if they believe it was without a valid reason or carried out improperly.

Wrongful dismissal, however, arises from contract law rather than statutory law. It occurs when an employer breaches the terms of an employee’s contract e.g., failing to provide the correct notice period (or payment in lieu of notice). A wrongful dismissal claim does not focus on the reason for dismissal but rather on whether the employer adhered to the agreed contractual terms.

Focus

For Unfair Dismissal, the focus is on the reason and process of dismissal, for example being dismissed for discriminatory reasons, without a valid reason e.g redundancy or not following a proper disciplinary or grievance procedure. For Wrongful Dismissal, however, the focus is on the contractual rights of the employee. For example, an employee might claim Wrongful Dismissal if the employer dismisses them without serving the correct notice period and the dismissal breaches other terms of their contract.

Eligibility

To be able to make a claim for Unfair Dismissal, employees generally need to have a minimum of two years qualifying period of continuous employment to bring a claim. Certain dismissals, for example those related to discrimination or whistleblowing are deemed automatically unfair and do not require a qualifying period.

For Wrongful Dismissal, there is no minimum service requirement and any employee with a valid contract can bring a claim for Wrongful Dismissal if their contractual terms are breached.

Remedies

Remedies for Unfair Dismissal are determined by a Tribunal and can include the following:

1. Reinstatement to the employee’s former role

2. Re-engagement in a similar role

3. Compensation, which often consists of a basic award and a compensatory award based onlost earnings and future prospects

Remedies for Wrongful Dismissal is primarily damages to compensate the employee for the financial loss caused by the breach of contract. This damage usually covers the unpaid notice period or other contractual entitlements e.g., bonuses or benefits.

Recent changes that have been made to the law

The government has recently introduced some reforms to the law which aims to enhance worker protections and modify existing employment practices. One of the biggest changes they have introduced is a day one right to claim Unfair Dismissal instead of needing to have a minimum of two years of continuous employment. This is beneficial to employees as they would gain immediate protection against being unfairly dismissed, which would improve their sense of security and confidence in their workplace. However, for employers, it would mean they would need to be more diligent from day one in documenting reasons for termination to ensure it complies with the law.

To conclude, Unfair Dismissal and Wrongful Dismissal both relate to the termination of employment, however their distinctions lie in the underlying laws, focus and remedies. Employers must ensure that they follow the correct procedures and contractual obligations to minimise the risk of disputes.

For employees, understanding these key differences can help in seeking the appropriate legal advice if they believe their dismissal was unfair or unlawful.

 If you are facing a dismissal issue and would like to seek legal advice further, please contact our Employment Law team on 01604 936512 / 01908 953674 or email info@franklins-sols.co.uk.

Contracts are entered into regularly by all of us, whether that be as consumers, suppliers, shareholders, investors – the list goes on. But what happens when one of the parties fails to adhere to their contractual obligations and breaches the contract? What remedies are available to the innocent party? This blog will outline the various remedies available in a breach of contract matter and the circumstances in which they may be awarded.

Repudiation

If another party to a contract fails to comply with the terms agreed, the innocent party may be entitled to ‘repudiate’ the contract, releasing themselves from any further obligations contained within the contract in addition to claiming against the wrongful party for any losses suffered as a result of the contract not being performed.

Alternatively, they may ‘affirm’ the contract, agreeing to continue with it despite the wrongful party’s breach, but reserving rights to claim against the wrongful party for any losses sustained as a result of the breach.

Damages

Perhaps the most common remedy for breach of contract is damages – monetary compensation for losses suffered by the innocent party.

Damages can come in two forms – ‘special’ damages and ‘general’ damages. Special damages are awarded for sums that can be easily quantified, such as a loss of profit, whereas general damages are awarded for losses that are not easily quantifiable such as loss of amenity.

It is important to note that damages are not awarded simply to punish the party in breach, but to ensure that the innocent party is placed in a position it would have been had the breach not occurred. Further, there are restrictions upon the extent to which damages may be awarded and a number of factors that ought to be taken into account by a party who has found themselves subject to another’s breach and careful consideration should be given to this.

Specific performance

If damages are unlikely to be adequate in the circumstances, an alternative would be to request an order from the Court for specific performance, requiring the party in breach to perform its positive obligations within a specified time frame.

Circumstances in which damages may be deemed as inadequate could include situations where the subject matter or product of the contract is unique and cannot be reasonably substituted or when damages would be financially ineffective in rectifying the position for the innocent party.

If you are party to a contract which has been breached and require advice or assistance with regards to the same contract our Dispute Resolution team on  01604 828282 / 01908 660966 or email litigation@franklins-sols.co.uk.

Contracts are entered into regularly by all of us, whether that be as consumers, suppliers, shareholders, investors – the list goes on. But what happens when one of the parties fails to adhere to their contractual obligations and breaches the contract? What remedies are available to the innocent party? This blog will outline the various remedies available in a breach of contract matter and the circumstances in which they may be awarded.

Repudiation

If another party to a contract fails to comply with the terms agreed, the innocent party may be entitled to ‘repudiate’ the contract, releasing themselves from any further obligations contained within the contract in addition to claiming against the wrongful party for any losses suffered as a result of the contract not being performed.

Alternatively, they may ‘affirm’ the contract, agreeing to continue with it despite the wrongful party’s breach, but reserving rights to claim against the wrongful party for any losses sustained as a result of the breach.

Damages

Perhaps the most common remedy for breach of contract is damages – monetary compensation for losses suffered by the innocent party.

Damages can come in two forms – ‘special’ damages and ‘general’ damages. Special damages are awarded for sums that can be easily quantified, such as a loss of profit, whereas general damages are awarded for losses that are not easily quantifiable such as loss of amenity.

It is important to note that damages are not awarded simply to punish the party in breach, but to ensure that the innocent party is placed in a position it would have been had the breach not occurred. Further, there are restrictions upon the extent to which damages may be awarded and a number of factors that ought to be taken into account by a party who has found themselves subject to another’s breach.

Three key factors to be taken into account are mitigation, causation and remoteness of damage which are outlined briefly below.

Mitigation

The innocent party in a breach of contract matter does still have a duty to ‘mitigate’ the losses they may suffer as a result of the breach. If such a party is deemed to have unreasonably inflated their losses or to have otherwise acted or omitted to act in such a way that has resulted in the losses increasing, such conduct will be seen as breaking the chain of causation (ie, removing the liability from the party at fault for the additional loss) and the damages to be awarded would instead be quantified as if the innocent party had acted reasonably.

It is therefore important to do all you can to reduce the impact and extent of any losses suffered by you if you do experience a breach of contract on the part of another contractual party, otherwise you are likely to have to bear the extent of these losses yourself without recovering them from the opposing party.

Causation

For a claim for damages to succeed, the innocent party must be able to prove that the party whom breached the contract ought legally to be held as having caused the losses being claimed and that there is a complete ‘chain of causation’ between the breach and the loss.

It is not sufficient to demonstrate only that factually the losses would not have been suffered if the breach had not occurred. Even if this is demonstrated, damages will not usually be awarded if it can be proven that an unexpected and intervening act, caused or greatly contributed to the losses suffered. Examples of such circumstances would be the actions of an independent third party unknown to the party in breach or an ‘act of God’.

Remoteness of damage

In addition to causation, a party claiming damages for breach of contract must also establish that the damages claim pass the test for what is known as remoteness of damage. This requires the innocent party to demonstrate that the losses suffered are within the scope of the wrongful party’s responsibility. Remoteness essentially stems down to whether or not the loss would have been foreseeable or in contemplation of the parties at the time the contract was entered into. Not only must it be established that the losses would have been a possible result of breach, but also not an unlikely result of breach.

There are two key factors which the Court would consider when determining whether or not the test for remoteness of damage is satisfied; the knowledge of what tends to happen in the “ordinary course of things” and any special circumstances relevant to the specific circumstances of the contract which the parties knew or ought to have known about.

Specific performance

If damages are unlikely to be adequate in the circumstances, an alternative would be to request an order from the Court for specific performance, requiring the party in breach to perform its positive obligations within a specified time frame.

Circumstances in which damages may be deemed as inadequate could include situations where the subject matter or product of the contract is unique and cannot be reasonably substituted or when damages would be financially ineffective in rectifying the position for the innocent party.

If you are party to a contract which has been breached and require advice or assistance with regards to the same contract our Dispute Resolution team on  01604 828282 / 01908 660966 or litigation@franklins-sols.co.uk.

An award for damages is the most common remedy awarded in a breach of contract claim and the aim of such awards is to place the innocent party in the position it would have been had the breach not occurred.

However, there are restrictions as to the extent to which damages may be awarded and a number of factors that ought to be taken into account by a party who has found themselves subject to another’s breach.

Three key factors to be taken into account are mitigation, causation and remoteness of damage. These are outlined briefly below.

Mitigation

Regardless of the wrongful party’s conduct, the innocent party in a breach of contract matter does still have a duty to ‘mitigate’ the losses they may suffer as a result of the breach. If such a party is deemed to have unreasonably inflated their losses or to have otherwise acted or omitted to act in such a way that has resulted in the losses increasing, such conduct will be seen as breaking the chain of causation (ie, removing the liability from the party at fault for the additional loss) and the damages to be awarded would instead be quantified as if the innocent party had acted reasonably.

It is therefore important to do all you can to reduce the impact and extent of any losses suffered by you if you do experience a breach of contract on the part of another contractual party, otherwise you are likely to have to bear the extent of these losses yourself without recovering them from the opposing party.

Causation

For a claim for damages to succeed, the innocent party must be able to prove that the party whom breached the contract ought legally to be held as having caused the losses being claimed and that there is a complete ‘chain of causation’ between the breach and the loss.

It is not sufficient to demonstrate only that factually the losses would not have been suffered if the breach had not occurred. Even if this is demonstrated, damages will not usually be awarded if it can be proven that an unexpected and intervening act, caused or greatly contributed to the losses suffered. Examples of such circumstances would be the actions of an independent third party unknown to the party in breach or an ‘act of God’.

Remoteness of damage

In addition to causation, a party claiming damages for breach of contract must also establish that the damages claim pass the test for what is known as remoteness of damage. This requires the innocent party to demonstrate that the losses suffered are within the scope of the wrongful party’s responsibility. Remoteness essentially stems down to whether or not the loss would have been foreseeable or in contemplation of the parties at the time the contract was entered into. Not only must it be established that the losses would have been a possible result of breach, but also not an unlikely result of breach.

There are two key factors which the Court would consider when determining whether or not the test for remoteness of damage is satisfied; the knowledge of what tends to happen in the “ordinary course of things” and any special circumstances relevant to the specific circumstances of the contract which the parties knew or ought to have known about.

Summary

As outlined above, it is important that an innocent party continues to act reasonably and proportionately in a breach of contract matter. This of course can be easier said than done when faced with a potential defendant acting in contravention of the terms agreed between you, but will reduce the risk of any sum of damages being reduced by the Court later down the line.

If you require advice or assistance with regards to a breach of contract claim our dispute resolution team are on hand to help on 01604 828282 or litigation@franklins-sols.co.uk.

What do I need to prove in a claim for breach of contract?

  1. That a contract exists – you must be able to demonstrate that there is a legally binding agreement between the parties;
  2. That one party has failed to comply with the contract – ie, they have not kept to their side of the bargain or have fallen short of the service or standards expected;
  3. That you have suffered loss – you should be able to evidence the financial losses you have suffered as a result of the other party breaching the contract.
  4. That the loss was foreseeable – ie, the party in breach knew or ought to have known that the losses would be sustained if the breach of contract occurred.

At Franklins we understand that you want a quick resolution that is also cost effective. We will work with you to provide specialist advice and ensure a full case plan is prepared to outline your options and next steps. Contact the Dispute Resolution Team on 01604 828282 / 01908 660966 or email Litigation@franklins-sols.co.uk.

When does a breach of contract occur? It is usually as a result of one of the following:-

Breaches of contract are categorised depending upon how serious they are to the relationship between the parties. They can be categorised as a:

A minor breach of contract can arise when a service or individual part is substituted for what was originally agreed between the parties in accordance with their contract and yet the contract itself can still be delivered despite the alteration. In other words, the breach only has a minor impact upon the contract.

A material breach of contract arises when there has been a more serious breach that goes to the heart of the contract itself. This generally means that one of the parties would not have entered into the contract without this element being agreed and part of the contract.

A fundamental or sometimes called a repudiatory breach of contract is so severe that the contract itself can be terminated. Termination of the contract is instead of the innocent party seeking compensation or what is known as damages against the offending party as would be the case if the breach were classified as a minor or material breach.

An anticipatory breach is when one party tells the other party to the contract that they will not be carrying out part of the contract or a specific term of the agreement which is still due to take place at a future point in time.

What can you do?

Make sure you have your contract and all associated documents and communication together and begin to consider the implications of what has happened. This will help begin to identify which category of breach the action (or lack of it) falls into.

As it may be possible to terminate the contract, acting promptly is important otherwise you may be deemed to have accepted the breach.

We can help advise you on the nature of a breach and the consequences. This will enable you to decide what steps to take next. Contact our Dispute Resolution team today on 01604 828282 / 01908 660966 or at litigation@franklins-sols.co.uk.

You find yourself in a breach of contract situation and now seek help and guidance. Are you entitled to damages to compensate you and if so, how they will be assessed?

When preparing to discuss this with your Solicitor, it is helpful to have the following information available. 

Damages are usually awarded to compensate for any loss suffered as a result of the defaulting party’s conduct. The purpose is to put the party suffering from the breach in the position that it would have been in had the contract been performed.

The following information is therefore helpful when you first meet your Solicitor:-

  1. A copy of the contract or agreement – if you have one!

In order to provide specific advice, it is important to have access to the contract and any variations (which could include emails) that have been agreed since the contract was signed.

  1. What financial loss has arisen as a result of the breach?

Details about the expenses, costs, liabilities and/or loss of profits that have arisen as a result of the breach of contract will all be needed. At this stage, is helpful to make a note of as many as possible that come to mind as a consequence of the breach and further jot down how such losses and claims could be proved with supporting documents and evidence. In doing so, it is vital that steps are taken to preserve all evidence.

  1. Can you do anything to mitigate the losses?

There is a duty on the party suffering a loss to take all steps to mitigate its position and to minimise the losses arising. Keeping a record of any steps taken to reduce the possible losses being incurred alongside details of any supporting evidence that could be relied upon to show that the mitigation had taken place will support your position.

  1. Are any of your losses or damages remote?

The position in pursuing a claim that is too remote arises from the principle that the loss must be in the reasonable contemplation of the parties at the time the contract was made. It must therefore “flow” directly from the breach and be reasonably foreseeable.

  1. Has the contract been breached due to the non-acceptance of goods or for non-delivery of goods?

If so, do you know the market value of the goods? Have this information to hand as in some circumstances where a buyer of goods refuses to accept delivered goods, refuses to pay for them or indeed where goods have not been delivered, then the damages are presumed to be the difference between the market value of the goods and the contract price.

  1. Does the breach arise due to defective goods?

If yes, provide all the reasons as to why the goods are defective and any supporting evidence. Damages in this type of case generally arise to be calculated based upon the difference between the value of the goods at the time of delivery and the value of the goods had they not been defective.

  1. Have you lost any management time dealing with this matter?

If it has been necessary for staff to investigate the breach and its consequences, it may be possible to recover that particular staff member’s wages. This can be difficult to prove and will only arise in exceptional circumstances.  It is however worthwhile keeping a note of the loss of management time in any event as it can also help focus your mind and also provide information as to the actual cost of the dispute as the case proceeds. This may be a relevant factor when considering the best alternative to Court Proceedings and during the course of negotiations.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk