Personal Finance: How to win the sack race

Bullying bosses needn't have it their own way

You may not be in line for being made redundant, but what happens if your employer decides to rewrite your contract against your will?

Contract changes vary from anti-poaching agreements - preventing employees from stealing clients - to increased hours of work or reduced pay.

But employees do have rights if their employer tries to change their terms of employment without consultation and agreement. The courts have established that reductions in an employee's pay without agreement, even to a small extent, amount to a serious breach of contract. Changes resulting in the loss of a car, a cut in holiday or a suspension of pension contributions are also likely to constitute a serious breach, with very expensive consequences for the employer.

Employees have a choice if changes are introduced: they can accept the changes and continue to work normally or they can leave. The latter course means that the employee is treating the contract as having been unlawfully terminated, known as constructive dismissal.

Constructive dismissals are not restricted to financial loss. A demotion or unwarranted relocation can give rise to a claim.

Employees who feel they have grounds for constructive dismissal do not have to walk out as soon as the changes are introduced. They are entitled to a "reasonable " period of time to think over a decision. But be careful; one employee who delayed two months before deciding he was not prepared to move to a new site was judged to have waited too long.

However, a foreman who was told that his wages would be reduced at the end of the month left three weeks after this point and was still able to claim that he had been dismissed.

Employees who remain at work while they consider their position should indicate to their employer, preferably in writing, that they do not accept the changes. If they fail to do so they will be deemed to have accepted changes.

Employees unwilling to take the constructive dismissal route should seek to minimise the effect of changes to their contracts by negotiating short- term amendments on the understanding that, when the employer's financial position improves, full rights will be restored. The objective is to be flexible, perhaps negotiating reduced hours or longer holidays, in return for reduced pay.

If an employee can establish that he or she has been constructively dismissed, there are two potential claims, one contractual and the other statutory. The contractual claim relates to the employer's failure to give the employee proper notice of dismissal.

In the last resort, such claims are normally pursued through the courts, although employment tribunals can make awards of up to pounds 25,000 in breach of contract cases. The starting point for calculating damages is the value of the net salary and benefits the employee would have received in the notice period.

Awards for unfair dismissals are usually made up of two parts, one depending on the employee's age and length of service (between pounds 110 and pounds 330 for each year of employment) and a compensatory award limited to a maximum of pounds 12,000 (to be increased to pounds 50,000 when the Employment Relations Bill becomes law this year).

In order to be eligible to bring a claim of unfair dismissal employees must normally have completed two years' employment. This qualifying period is being challenged in the House of Lords, and will be reduced to one year by the Employment Rights Bill.

Claims, whether statutory or contractual, must normally be submitted to an employment tribunal within three months of the date of alleged dismissal - the date on which the employee walks out.

If you are thinking of treating yourself as having been constructively dismissed you should consider the financial consequences very carefully. If your employer refuses to reach a swift settlement you may find yourself without money until you have found another job. In addition, no employer facing legal action is likely to be willing to provide a reference.

It is also worth remembering that no employer is under a legal obligation to provide a reference. In the light of this, as many workers have decided, keeping a job may be preferable to compensation and a P45.

The writer is a partner and employment specialist with the city law firm Bird & Bird. He is also author of the `Which? Guide to Employment'

Suggested Topics
Arts and Entertainment
The Doctor and Clara have their first real heart to heart since he regenerated in 'Deep Breath'
TV
Life and Style
Apple showed no sign of losing its talent for product launches with the new, slightly larger iPhone 6 making headlines
techSecurity breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Arts and Entertainment
Jamie Oliver
filmTV chef Jamie Oliver turned down role in The Hobbit
News
The official police photograph of Dustin Diamond taken after he was arrested in Wisconsin
peopleDownfall of the TV star charged with bar stabbing
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
Arts and Entertainment
Jeremy Clarkson, left, and Richard Hammond upset the locals in South America
tvReview: Top Gear team flee Patagonia as Christmas special reaches its climax in the style of Butch and Sundance
News
people
Sport
Ashley Barnes of Burnley scores their second goal
footballMan City vs Burnley match report
Arts and Entertainment
Peter Mayhew as Chewbacca alongside Harrison Ford's Han Solo in 'Star Wars'
film
News
i100
Arts and Entertainment
Man of action: Christian Bale stars in Exodus: Gods and Kings
film
Arts and Entertainment
Tracy Emin's 1998 piece 'My Bed' on display at Christie's
artOne expert claims she did not
News
Ernesto Che Guevara and Fidel Castro, right, met at Havana Golf Club in 1962 to mock the game
newsFidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
News
Hackers revealed Oscar-winning actress Lawrence was paid less than her male co-stars in American Hustle
people
Arts and Entertainment
Clueless? Locked-door mysteries are the ultimate manifestation of the cerebral detective story
booksAs a new collection of the genre’s best is published, its editor explains the rules of engagement
Sport
Robin van Persie is blocked by Hugo Lloris
footballTottenham vs Manchester United match report
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs General

    Recruitment Genius: Business Manager

    £32000 - £40000 per annum: Recruitment Genius: A Business Manager is required ...

    Recruitment Genius: Operations Manager

    £45000 - £55000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Panel & Cabinet Wireman

    £20000 per annum: Recruitment Genius: Panel Wireman required for small electro...

    Recruitment Genius: Electronics Test Engineer

    £25000 - £27000 per annum: Recruitment Genius: An SME based in East Cheshire, ...

    Day In a Page

    A timely reminder of the bloody anniversary we all forgot

    A timely reminder of the bloody anniversary we all forgot

    Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
    Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

    Homeless Veterans appeal

    Former soldiers pay their respects to a friend who also served
    Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

    Scarred by the bell

    The downfall of the TV star charged with bar stabbing
    Why 2014 was a year of technological let-downs

    Why 2014 was a year of technological let-downs

    Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
    Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

    Will revolutionary Cuba take 'bourgeois' golf to its heart?

    Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
    The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

    The Locked Room Mysteries

    As a new collection of the genre’s best is published, its editor explains the rules of engagement
    Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

    How I made myself Keane

    Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
    Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

    Parting view of Ofcom chief... we hate jokes on the disabled

    Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
    A look back at fashion in 2014: Wear in review

    Wear in review

    A look back at fashion in 2014
    Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

    Ian Herbert: My 10 hopes for sport in 2015

    Might just one of them happen?
    War with Isis: The West needs more than a White Knight

    The West needs more than a White Knight

    Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
    Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

    'The day I was shot by the Taliban'

    Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
    Revealed: the best and worst airlines for delays

    Revealed: the best and worst airlines for delays

    Many flyers are failing to claim compensation to which they are entitled, a new survey has found
    The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

    The stories that defined 2014

    From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
    Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

    Disaster looming? Now you know where to head...

    Which British city has become the first to be awarded special 'resilience' status by the UN?