Weekly dilemma… Reverting to original terms after acting up

An employee has been receiving an allowance of 10% above salary to carry out the duties of the next grade. Having now done this for five years, and in more than one job at the higher grade, does the employee have a right to receive the higher grade salary? The issue is likely to come to a head shortly when a decision is taken to revert the employee to his original, lower grade. The employee has performed at a suitable standard in the higher grade.

After five years, it is very likely that the employee has accrued a contractual right both to receive the higher grade salary, and to undertake duties at the higher grade. The implied term of trust and confidence is also likely to mean that you cannot simply decide to revert the employee to his substantive grade, and thereby reduce his responsibilities and/or salary. One possible exception to this may be that the employee was engaged in long-term project work, and there is a clear written statement that, once the project work is finished, the employee will revert to his substantive grade.

If you simply change the employee’s duties and/or reduce their pay, you will run a serious risk of breaching both the express terms of the contract, and the implied duty of trust and confidence. This may give rise to claims of breach of contract, unauthorised deductions from wages and (if the employee resigns in response) constructive unfair dismissal.

You should consider whether reverting the employee’s duties and pay back to his substantive grade is the right thing to do after all this time, as opposed to confirming the employee’s position in the higher grade. However, if you want to proceed as planned, as a minimum, you need to have clear and good business reasons for doing so, and you should engage in consultation with the employee.

To avoid facing the claims referred to above, you should obtain the employee’s agreement before reverting him to his original grade. If you proceed without his consent, you will run the risk of claims being made against you.

By Robin Jeffcott, head of employment group, Richards Butler

Each week we ask the experts to answer your legal dilemmas. If you have a legal question or dilemma, e-mail dawn.spalding@rbi.co.uk

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