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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 49818
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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can I be demoted at 3 years preserved salary due to business

Customer Question

can I be demoted at 3 years preserved salary due to business restructure? I am permanently assigned to subsidiary company, are my terms and conditions not protected via the parent company in terms of contract, salary etc? The demotion will result in me losing a third of my salary after 3 years and is a major drop in job status. I am currently a manager and new position will be same as staff who currently report to me
Submitted: 4 years ago.
Category: Employment Law
Expert:  Ben Jones replied 4 years ago.

Ben Jones :

Hello, my name is Ben and it is my pleasure to assist you with your question today. How long have you worked there?

JACUSTOMER-ysjun2e2- :

local authority since 1996, tupe to housing organisation 2006, accepted current post with subsidiary at same terms and conditions since April last year

Ben Jones :

OK, thank you, please leave this with me - I will look into this for you, get my response ready and get back to you on here. No need to wait around and you will get an email when I have responded, thank you

Ben Jones :

Many thanks for your patience. I am just finalising my advice but need to check one more thing – has redundancy been mentioned as potentially applying in this situation?

JACUSTOMER-ysjun2e2- :

hi ben, redundancy is applying to other positions but not mine, same grade although not same role, wording on letter which details restructure refers to the duties of my role and that of one other being amalgamated into the lower grade after the 30 day consultation period, not sure if it makes a difference but I am over 55.

Ben Jones :

If you moved to the subsidiary on the same terms and conditions which you had with the old employer, then you can certainly argue that these should be retained and these changes not implemented. What the employer is effectively trying to do now is to change your term and conditions. There are a few ways in which an employer may try and make changes to an employee’s contract of employment. These are by:

• Receiving the employee’s express consent to the changes.

• Forcefully introducing the changes (called 'unilateral change of contract').

• Giving the employee notice to terminate their current contract and then offer them immediate re-engagement under a new contract that contains the new terms.

If the changes are introduced without the employee's consent, then the following options are available:

1. Start working on the new terms but making it clear in writing that you are working ‘under protest’. This means that you do not agree with the changes but feel forced to do so. In the meantime you should try and resolve the issue either by informal discussions or by raising a formal grievance.

2. If the changes fundamentally impact the contract, for example changes to pay, duties, place of work, etc., you may wish to consider resigning and claiming constructive dismissal. The resignation must be done without unreasonable delay so as not to give the impression that the changes had been accepted. The claim must be submitted in an employment tribunal within 3 months of resigning and is subject to you having at least 2 years' continuous service. You would then seek compensation for loss of earnings resulting from the employer's actions.

3. If the employment is terminated and the employer offers re-engagement on the new terms that could potentially amount to unfair dismissal. However, the employer can try and justify the dismissal and the changes if they had a sound business reason for doing so. This could be pressing business needs requiring drastic changes for the company to survive. If no such reason exists, you can make a claim for unfair dismissal in an employment tribunal. The same time limit of 3 months to claim and the requirement to have 2 years' continuous would apply.

Finally, it is also worth mentioning that sometimes employment contracts may try to give the employer a general right to make changes to an employee’s contract. As such clauses give the employer the unreserved to change any term, so as to evade the general rule that changes must be mutually agreed, courts will rarely enforce such clauses. Nothing but the clearest language will be sufficient to create such a right and the situation must warrant it. Any attempt to rely on such clauses will still be subject to the requirement of the employer to act reasonably and can be challenged as above.