Right of Employer to Unilaterally Vary Employees' Contracts

In Bateman and others v Asda Stores Ltd UKEAT/0221/09 the Employment Appeals Tribunal (EAT) held that Asda was entitled to rely upon a provision in its staff handbook reserving the right to vary contractual terms in order to introduce new pay terms, without first obtaining the express consent of the affected employees.

The majority of Asda's employees voluntarily accepted a proposed new pay regime subsequent to Asda undertaking extensive consultation. The remaining employees were involuntarily transferred to the new pay regime in reliance on a provision in Asda's staff handbook allowing Asda to "review, revise, amend or replace" the contents of the handbook and introduce new polices to "reflect the changing needs of the business". Those employees who were involuntarily transferred to the new regime claimed, among other things, that they had suffered unauthorised deductions from wages in breach of section 13 of the Employment Rights Act 1996.

The EAT held that the provision in the handbook contained a clear and unambiguous power to vary the contracts to reflect the changing needs of the business and it therefore allowed Asda to both amend the handbook and introduce new policies without employee consent. As there was no ambiguity in the wording of the provision, there was no need to invoke the ‘contra proferentum' rule, by which the provision would have had to be interpreted in the claimants' favour.