An employer cannot simply rewrite the terms of an employee’s employment agreement whenever it suits the business.
Employees have legal protections against unilateral changes to their employment conditions, and an employer who disregards those protections may face a personal grievance claim for unjustified disadvantage.
What Is a Unilateral Variation?
A unilateral variation occurs when an employer changes an employee’s terms or conditions of employment without obtaining the employee’s agreement.
Such changes might include reducing working hours, altering pay arrangements, changing work locations, removing benefits, or significantly changing an employee’s duties and responsibilities.
While employers have the right to manage their businesses and make operational decisions, that authority does not automatically extend to changing contractual employment terms without consent.
When Does a Change Become Unlawful?
Whether an employer can make a particular change depends on the employment agreement, the nature of the change, and the process followed.
Some employment agreements expressly allow employers a degree of flexibility, such as making reasonable adjustments to rosters or duties. However, these provisions do not necessarily give employers unlimited discretion.
Where a proposed change affects an employee’s contractual rights, the employer will generally need to obtain the employee’s agreement. Employers must also comply with their duty of good faith, including relevant consultation obligations.
Simply informing an employee that a change will take effect does not necessarily make that change lawful.
Unjustified Disadvantage and Personal Grievances
Under section 103(1)(b) of the Employment Relations Act 2000, an employee may raise a personal grievance where their employment, or a condition of their employment, has been affected to their disadvantage by an unjustifiable action of their employer.
For example, an employee whose guaranteed hours are reduced without agreement may suffer financial loss. Similarly, an employee who is transferred to substantially different duties or has an agreed benefit withdrawn may have grounds to challenge the employer’s decision.
However, not every workplace change amounts to an unjustified disadvantage. The circumstances, contractual provisions, justification for the employer’s actions, and fairness of the process must all be considered.
What Can Employees Do?
An employee who believes their employment terms have been unlawfully changed should raise their concerns promptly, preferably in writing.
A personal grievance must generally be raised with the employer within 90 days of the action complained of, subject to limited exceptions.
If the matter cannot be resolved directly, the employee may seek mediation through the Ministry of Business, Innovation and Employment (MBIE). Unresolved disputes may ultimately be referred to the Employment Relations Authority.
Depending on the circumstances, remedies may include reimbursement of lost wages, compensation for humiliation, loss of dignity and injury to feelings, or other appropriate relief.
Protecting Your Employment Rights
Employment agreements are binding on both employers and employees. Business pressures, financial difficulties or changes in management do not automatically entitle an employer to disregard agreed employment conditions.
Employees confronted with significant changes to their employment terms should obtain legal advice before accepting those changes or taking steps that could affect their rights.
If your employer has changed your employment conditions without your agreement, a barrister experienced in employment law can assess whether those changes give rise to an unjustified disadvantage personal grievance.
This article provides general information only and is not a substitute for legal advice about your particular circumstances.