Unilateral changes to terms and conditions of employment

January 23rd, 2013, Published in Articles: Vector

An employer may sometimes want to change their employees’ terms and conditions of employment, but goes about it in the wrong way. I sometimes appear at Council or the CCMA with disputes relating to such “one sided” or unilateral changes to terms and conditions of employment.

The employee states that the employer has made some unilateral change to the original terms and conditions of employment. The change may be a reduction in salary; a reduction in commission; the removal of or reduction in some other benefits such as bonuses etc.

A change could also include the sudden unilateral introduction of additional terms and conditions of employment such as a condition stating that the salesperson will not be paid commission until the client has paid. It is possible that some of these unilateral changes could also constitute unfair labour practice.

Employers are reminded that any significant variation in the terms and conditions of employment of an employee may well constitute a dismissal in terms of Section 186 of the Labour Relations Act. Put differently, by enforcing unilateral changes, the existing contract of employment is effectively terminated and substituted by a new contract.

This does not mean that every unilateral amendment of employment terms and conditions will be seen as a dismissal, but rather that the employer wishes to continue the employment relationship on altered terms which have not been agreed on by the employee, and where the employer does not consult with the employee on the changes.

Changes to terms and conditions of employment cannot be made without prior consultation with the employee or without the employee’s agreement.

The remedies available to an employee are in terms of section 64 (4) of the LRA, which suggests that the employee refer the dispute to the CCMA or a bargaining council. The referring party may require the employer not to implement the change unilaterally to the terms and conditions of employment or, if the employer has already implemented it, the referring party may require the employer to restore the terms and conditions of employment that applied before the change.

The unilateral variation or change also constitutes a breach of contract which constitutes civil action.

If the terms and conditions of the original employment contract are to be changed because of operational requirements of the employer, it is possible that, upon refusal by the employees to accept the changes, the employer may, under certain circumstances, be entitled to embark on retrenchment procedures. This does not mean that it is a simple matter of a refusal of acceptance by the employees, immediately followed by retrenchment of those employees.

In conclusion, the changes to terms and conditions of employment should be approached with careful forethought and planning to avoid employees from exercising their right in terms of referring a dispute to the CCMA.

Shantonette Naidoo, regional director, KwaZulu-Natal