Legal update: Can an employee continuing to work amount to acceptance of a unilateral variation of terms in an employment contract?

When an employee simply continues to work after an employer’s unilateral change in terms and conditions of an employment contract, can this constitute acceptance? We examine the case of Wess v Science Museum Group.

Background

The employee was initially employed on “Civil Service” terms until the time of a restructuring exercise in 2003 when she was offered a new, lower grade position as Curator of Science. The employee received an entirely new contract which contained a reduced notice entitlement. The employee did not sign the new contract but did not indicate that she did not accept the revised terms. Conversely, she did appeal against the reduced grading of her new position, which led to it being re-graded to Senior Curator. The employee’s employment was later terminated on the ground of redundancy and she brought a claim against her employer for the longer period of notice.

Legal Principles

In situations where the employee has not signed revised terms in an employment contract, the English Employment Appeal Tribunal (“EAT”) stated that, when considering whether the employee continuing to work amounts to acceptance of a variation of the terms, the Tribunal should treat with caution the argument that the employee has impliedly accepted a unilaterally imposed new terms, at least where the effect of the new terms is not immediate.

Where a new term has an immediate effect on the employee, it may be reasonable to conclude that continued working implies acceptance. The EAT referred to the case of Solectron Scotland Ltd v Roper [2004] IRLR 4 EAT, which stated:

“The fundamental question is this: is the employee’s conduct, by continuing to work, only referable to his having accepted the new terms imposed by the employer? That may sometimes be the case. For example, if an employer varies the contractual terms by, for example, changing the wage or perhaps altering job duties and the employees go along with that without protest, then in those circumstances it may be possible to infer that they have by their conduct after a period of time accepted the change in terms and conditions.”

However, where the employer unilaterally changes terms of the employment contract which do not have an immediate effect (such as the period of notice), then the fact that employee continues to work does not mean that the employee can be taken to have accepted the variation in the employment contract.

Decision

In this case, the EAT found that the employee had impliedly consented to the reduced notice on the following grounds:-

1.    the employee had taken steps to expressly object to part of the revised terms in the new contract (i.e. grading of her new job position) but she did not object to the changes in the terms and conditions, including her notice period;
2.    realizing the change to her notice period (being one of the various changes), she continued to work to the new contract without objection;
3.    the employee held a trade union role and was someone who could be expected to have regard to the detail of the terms and conditions and raise queries if they arose (as indeed she did on the grading);
4.    a notice period can have an immediate impact on an employee as it impacted upon job security, which can have a real and practical importance for the employee; and
5.    the employer introduced an entirely new contract with an entirely new package (i.e. new terms and conditions, job description and handbook) which departed from the former contract and she could not cherry-pick as between the old and new contracts.

Conclusion

The decision in Wess v Science Museum Group serves as an important reminder to employers to exercise care to ensure that employees sign and agree to any revisions to terms and conditions of employment made in the course of employment. The employer may not be able to rely on the employee continuing work as acceptance to the variation. Each case will depend upon its own facts but there is a clear risk that the employee continuing to work will not be sufficient to evidence their acceptance, especially where the effect of the change to the contract is not immediate.

On the other hand, employees should also make it clear if they do not accept any proposed changes to the terms and conditions of their employment contract as working on without raising objection may constitute acceptance, especially if:-

1.    they raise objection to other variations which have been imposed; and/or
2.    if the change has an immediate effect, such as change in hours or pay.

For legal advice on employment matters in Hong Kong law please contact Partner Russell Bennett.