How easy is it for an employer to impose a pay freeze? In Abrahall v Nottingham City Council, the Court of Appeal decided that a group of employees had not ‘agreed’ to a pay freeze when they continued to work without protest afterwards. In 2011, the Council imposed a two year pay freeze. The recognised unions objected, but did not raise a formal grievance. Two years went by before the Council tried to freeze pay again in 2013. At that point, employees brought claims for unlawful deduction from wages based on their contractual right to a pay rise.
The Court of Appeal decided that the employees had not accepted the earlier pay freeze. Despite working for two years without protest, the trade union had protested on behalf of employees at the time of the pay freeze. The Court also noted that the employees had continued to work when the contractual change was of no benefit to them. The Court concluded that the employees’ actions did not show ‘unequivocal acceptance’ of the change.
This case shows how complex the process of changing terms and conditions can be. Employers should remember that the safest way is to get an employee’s express written agreement to any proposed changes.
For advice on pay freezes and for other HR queries, visit our Employment Law page here.