Personal Finance: How to win the sack race
Bullying bosses needn't have it their own way
Saturday 24 April 1999
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'
Swedish stars ask fans for £195 pledges on crowd-funding website
voicesJust when you thought you could find a man, get married, and have a baby by the age of 35... it turns out you’re too late, says Grace Dent
sportNapoli 2 Arsenal 0: Gunners must now face either Real Madrid, PSG, Bayern Munich, Atletico Madrid or Barcelona in knock-out stages
musicAs Mariah Carey and Noddy Holder rake in the royalties from their classics, why there hasn't been a decent festive hit for 20 years?
theatreAuthor Daniel Rosenthal recalls the mishaps that almost brought the curtain down on the likes of John Gielgud and Diana Rigg
filmFilm producers sue Warner Bros for $75m over Hobbit films
lifeAs the Royal Mail plans to phase out deliveries on two wheels, it's no wonder posties are in a spin
musicThe 21-year-old beat Ella Eyre and Chlöe Howl to win the honour
lifeFull of the joys and want to help your fellow man? December isn't the time to do it
techLuke Blackall reports on precision engineered prams and babygros that monitor your child 24-7
Life & Style blogs
YouTube: Top trending videos of 2013 - including Tom Daley and Peppa Pig
Chinese scientists 'increasingly confident' about invisibility cloak after making a cat disappear
GTA 5 update: Content Creator released, online heists and story mode updates coming soon
The rise of goo-goo gadgets: Hey baby, nice wheels!
Pirate Bay sets sail for Ascension Island after SX domain name seized by authorities
- 1 Nelson Mandela memorial: ‘Bogus’ interpreter made mockery of Barack Obama’s tribute
- 2 It’s shameful that our universities have accepted gender segregation under pressure from the most oppressive religious fanatics
- 3 John McAfee's $100 'anti-NSA' device: 'this is coming and cannot be stopped'
- 4 Is Facebook making us forget? Study shows that taking pictures ruin memories
- 5 Australia incest case: Filthy and severely deformed children found in remote farming community after generations of inbreeding
£77099.84 - £96375.26 per annum + Bonus + Benefits : Harrington Starr: My clie...
£45000 - £60000 per annum + Bonus and Package: Harrington Starr: Trading appli...
£35000 - £38000 per annum + Benefits: Harrington Starr: C# .NET Developer (Win...
£60000 - £70000 per annum + Benefits: Harrington Starr: Senior QA Engineer Tes...