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
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Life and Style
ebooksFrom the lifespan of a slug to the distance to the Sun: answers to 500 questions from readers
Money
Welcome to tinsel town: retailers such as Selfridges will be Santa's little helpers this Christmas, working hard to persuade shoppers to stock up on gifts
news
News
i100
News
people
Arts and Entertainment
Architect Frank Gehry is regarded by many as the most important architect of the modern era
arts + entsGehry has declared that 98 per cent of modern architecture is "s**t"
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
arts + entsSam Smith’s Mobo triumph is just the latest example of a trend
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

    Maths Teacher

    £110 - £200 per day: Randstad Education Leeds: Secondary Maths Teacher for spe...

    Business Analyst - Surrey - Permanent - Up to £50k DOE

    £40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

    ***ASP.NET Developer - Cheshire - £35k - Permanent***

    £30000 - £35000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

    ***Solutions Architect*** - Brighton - £40k - Permanent

    £35000 - £40000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

    Day In a Page

    Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

    Wilko Johnson, now the bad news

    Former Dr Feelgood splits with manager after police investigate assault claims
    Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

    Mark Udall: The Democrat Senator with a fight on his hands

    The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
    New discoveries show more contact between far-flung prehistoric humans than had been thought

    New discoveries show more contact between far-flung prehistoric humans than had been thought

    Evidence found of contact between Easter Islanders and South America
    Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

    Cerys Matthews on Dylan Thomas

    The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
    DIY is not fun and we've finally realised this as a nation

    Homebase closures: 'DIY is not fun'

    Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
    The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

    Air New Zealand's wizard in-flight video

    The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
    Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

    Pumpkin spice is the flavour of the month

    The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
    11 best sonic skincare brushes

    11 best sonic skincare brushes

    Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
    Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

    Paul Scholes column

    I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    While other sports are stalked by corruption, we are an easy target for the critics
    Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

    Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

    Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

    A crime that reveals London's dark heart

    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
    Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

    Lost in translation: Western monikers

    Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
    Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

    Handy hacks that make life easier

    New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
    KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

    KidZania: It's a small world

    The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker