Changing terms and conditions of employment
Following a recent ruling, I answer the question whether an employer may change an employee’s terms and conditions of employment. Sometimes an employee does not perform optimally in a particular job or does not fit well in a department. The employer tries to solve this by having the employee perform other work or, for example, assigning him or her to another place of employment. But this is not allowed just like that… This article will tell you why this cannot and should not be allowed.
The Subdistrict Court in Utrecht dealt with such an issue during summary proceedings in September this year. The case concerned an employee who worked as a Lead Engineer at a company through a secondment agency. When his supervisor at that company fell seriously ill, they asked him to take over some of his managerial tasks. A month later, an interim manager was hired to replace the rest of the manager’s job. The employee continued to perform the previously transferred tasks as usual. Not much later, the employee was asked to join the company permanently. He did so, and it was agreed in his employment contract that he would fill the position with ‘Team Leader Draughtsmen and Engineers’. The agreed salary was appropriate for this position.
Unfortunately, after a while, the employer received complaints from the team of draftsmen and engineers about cooperation with the employee. To resolve this, the employer decided to abolish the Team Leader Draughtsmen and Engineers position in its entirety to ensure that the employee would agree to return to his old position of Lead Engineer. To this, the employee did not agree and demanded in court that he remain in his new position. The employer argued that the job title Team Leader had been a mistake and no change had ever taken place. This defence did not succeed. According to the subdistrict court, it was clearly not a mistake, nor did the employer have a compelling interest in changing the position.
Change of employment conditions
So when is it permissible to change terms and conditions of employment? And is consent of the employee always required? In principle, consent of the employee is the starting point.
Terms and conditions of employment
What exactly falls under the term ‘terms and conditions of employment’ is not tightly defined. But it could include holidays, leave arrangements, expense allowances or a change of place of work. It does not apply to changing essential parts of the employment contract, such as working hours and basic pay.
Unilateral change clause
However, the law grants the employer the possibility to unilaterally change employment conditions of the employment contract, provided this is agreed in writing and the employer has such a compelling interest that the employee’s interest must reasonably give way. This possibility was created to be able to react quickly and adequately to changing circumstances. If the employer wants to make use of this possibility, it must first be assessed whether there is a compelling interest and then whether this interest outweighs the employee’s interest.
If there is nothing on paper about the right to unilaterally change the employment conditions, the employee’s consent is required. The standards of being a good employer and a good employee apply here. It should be examined whether there is a justified reason to change the employment conditions. And if there is, it should then be examined whether the employee can reasonably be required to accept a proposal to change. These are three questions: is there a just cause; is the proposal reasonable; and is it reasonable to expect the employee to agree to it. Of course, as is often the case, all the circumstances of the case should be considered here.
In the employee’s case, a unilateral modification clause had been agreed. The court considered that the employer in this case had not sufficiently substantiated why it believed it was entitled to invoke the amendment clause. This was because the employer’s primary argument was that the job title Team Leader was a mistake and the employee had never actually changed positions and therefore there was no change at all. But the subdistrict court disagreed. So this ‘mistake’ in this case could not be reversed by the employer.
In short, even if parties have included a unilateral changes clause in the employment contract, there should always be a balancing of interests between the interests of employer and employee.
Location: Court of Midden-Nederland 07-09-2023, ECLI:NL:RBMNE:2023:4657
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