Employee Consent to Change Employment Terms is a critical legal consideration when altering workplace agreements. A contract of employment typically outlines key terms such as job duties, working hours, remuneration, leave, and bonus structures. These terms must be presented in writing—either as a formal contract or a written statement. Once documented, employers often question whether changes can be made unilaterally or if employee consent is required before modifying these terms.
LEGAL BACKGROUND:
In terms of Common Law, certain Collective Bargaining Agreements, and the National Minimum Wage Act, an employer may not unilaterally make changes to an employee’s terms and conditions of employment — Employee Consent to Change Employment Terms is essential. As a contract of employment is an agreement between two parties, neither can alter its terms or conditions without the other’s consent, as doing so would constitute a breach of contract.
In accordance with section 64(4) of the Labour Relations Act, an employee may refer a dispute to the CCMA or relevant Bargaining Council if any terms or conditions are changed unilaterally. Such action may lead to strike action and, because a unilateral change is a breach of contract, it could also result in civil litigation for damages or due performance.
It is not uncommon for companies to face financial difficulties and need to consider the reduction of wages and hours worked, known as short-time, to assist the company during such a time.
In order to consider these changes to the terms and conditions of employment, the employer is to consult with the employees or union representative to fully consider the company’s position, the length of time that these certain changes will occur for and the extent of the said changes. This is to allow the employees to voice any concerns, ask any questions or provide any alternatives to the implementation of any changes to the terms and conditions of employment prior to consenting to such.
In instances where employees refuse to agree to the relevant changes to the terms and conditions of employment, the employer may exercise its right to consult with the employees regarding possible retrenchment whereby the implementation of short-time will be an alternative to said retrenchment and a measure that can be taken to avoid the retrenchment of staff, which is ultimately seen as a last resort.
CASE STUDY:
In the case of Hartley v SMD Trading Group CC (D138/21) [2024] ZALCD 16 (26 June 2024), Mr. Hartley brought his matter before the Labour Court as his employer reduced his salary in February 2019 by 67% due to financial constraints, without proper consultation or consent from the employee. Other senior members of the company also received reduced remuneration during this time, however, on a much smaller scale of between 10% and 30%.
The company submitted that the reduction in salary was agreed to verbally which Judge Snyman advised that, in terms of the Basic Conditions of Employment Act, the duty is squarely upon the company to keep and maintain proper records pertaining to the salaries of employees, which includes any increases or reductions thereof. Section 29(1) states that an employer must supply an employee with a number of particulars in writing, and section 29(2) states that when any matter pertaining to the written particulars in subsection (1) changes, the written particulars must be revised to reflect the change, and the employee must be supplied with a copy of the document reflecting such change.
Judge Snyman further submitted that the company, by unilaterally reducing Mr. Hartley’s salary by 67%, breached his contract of employment, which entitled the employee to resign and claim damages, which amounted to R460 500.00 for the difference in his salary for the months of February, March and April 2019. The lack of documentary evidence of any such agreement to the reduction resulted in the company being liable for the above amount which was to be paid to the employee.
CONCLUSION:
Employers are required to consult with their employees if they intend to make any changes to the terms and conditions of employment, as Employee Consent to Change Employment Terms is a legal necessity. If employees do not agree to the proposed changes, there are alternative legal processes that employers may follow — such as retrenchment or implementing short-time — to minimise the risk of adverse outcomes at the CCMA or Labour Court.
