In 2012 the government announced its intention to change doctors’ terms and conditions of employment. The parties entered into lengthy discussions and negotiations but relations broke down in 2014.
The following year, the Secretary of State for Health, Jeremy Hunt, announced that in the absence of a compromise he would be imposing the new contracts onto junior doctors, as the government had committed to a round the clock (7 day) service in its election manifesto.
In response, the British Medical Association backed its members and supported strike action. Talks once again commenced with the assistance of ACAS, but alas a deal could not be done and so Jeremy Hunt confirmed that he would be imposing the new contracts forthwith.
Following this decision, Justice for Health, (a group founded by five doctors) mounted a legal challenge in the High Court arguing that the new contract was "unsafe and unsustainable" and Mr Hunt did not have the power to impose it.
However, junior doctors recently lost their High Court battle as the judge ruled that the health secretary had acted "squarely" within his powers. Specifically, the judge observed that Mr Hunt was merely recommending that NHS trusts introduce the contract, rather than compelling them to do so.
Accordingly, the judge observed that "in principle" trusts had the freedom as employers to decide as to whether they enforced the contract onto doctors.
Changing contract terms
This raises the thorny issue of how employers can impose new terms onto employees. A contract can only be amended in accordance with its terms or with the agreement of the parties.
Some employment contracts will contain a clause giving the employer a general power to vary the terms therein, but this is usually interpreted very narrowly by the Tribunals, and any ambiguity will be resolved in favour of the employee.
In the absence of a variation of terms clause, there are just three ways in which an employer can vary a contract of employment:
1. By obtaining the employee's express agreement to the new terms.
- Agreement must be given voluntarily and free from duress. A consultation process with the affected employees can achieve this. Employers should try to obtain written confirmation of the agreement. However, contract law requires any agreed variation of terms to be supported by consideration, i.e. some form of benefit passing to the employee such as a salary increase or bonus. This is particularly important to bear in mind when introducing new restrictive covenants, as an absence of consideration can lead to the covenants being held to be unenforceable.
2. Unilaterally imposing the change and relying on the employee's conduct to establish implied agreement to the change.
- An employer who imposes a contractual change without the employee’s express or implied agreement will be in breach of contract and risks an unfair dismissal claim if the employee resigns in response. Even if the employee continues to work, they may do ‘under protest’ (and reserving their right to bring a claim for breach of contract or unlawful deductions from wages). This route can therefore be risky and uncertain.
3. Terminating the employee's contract of employment and offering re-employment on the new terms.
- The employer must serve proper contractual notice or be liable for a wrongful dismissal claim. Moreover, termination of the existing contract will constitute a dismissal in law and employees could still bring unfair dismissal claims in the ordinary way. To mitigate against this possibility it is important to have a sound business reason for the changes and to consult with the employee in good faith beforehand.
Imposing contractual changes without the employee’s express or implied agreement can be a risky – and potentially expensive – business.
Whilst Jeremy Hunt was not held to be acting outside the scope of his powers, other employers are unlikely to be as lucky.