Are unilateral changes to an employment contract legal?

Black’s Law Dictionary (9th Edition) defines constructive dismissal as:

“A termination of employment brought about by the employer making the employee’s working conditions so intolerable that the employee feels compelled to leave”
It’s expected that terms and conditions of employment may change from time to time and, therefore, Section 10(5) of the Employment Act, 2007 provides that: –

“Where any matter stipulated in subsection (1) [the employment contract] changes, the employer shall, in consultation with the employee, revise the contract to reflect the change and notify the employee of the change in writing.”

A decision taken ‘in consultation with’ another is one that’s taken after a discussion with the other party about the thing that’s being decided.

If there’s trade union involved, the Recognition Agreement and Collective Bargaining Agreement will no doubt outline the procedure of making changes to the contractual terms.

This is not usually a problem if the proposed change is to the employee’s benefit; the problem arises where the proposed change is to the employee’s detriment; in such a case, the employer should not only consult but should also get the consent of the employee, if this is not done the results could be any of the following: –

consultation

Constructive dismissal

A constructive termination arises where the employer, in the absence of any justifiable reasons for dismissal, proceeds to “construct” circumstances that will bring about a dismissal. A unilateral change to a contract may amount to a constructive dismissal. For the Court to hold that a constructive dismissal has occurred, the following must be established by the employee: –

That the employer made a fundamental change to the contract of employment;
That such change was unilateral;
That the situation was so intolerable that the employee was unable to continue working;
That the employee would have continued working had the employer not created the intolerable work environment; and
That the employee resigned because he did not believe the employer would abandon the pattern of creating an unacceptable work environment.
See: –

Henry Ochido v NGO Co-ordination Board (Transferring an employee to another town without prior consultation)
Elizabeth Kwamboka Khaemba v BoG Cardinal Otunga High School Mosocho & 2 others (Altering an employee’s job description without consultation)
Anthony Mkala Chitavi v Malindi Water & Sewerage Company Ltd
3-void

No effect

The Court may ignore the change/amendment and uphold the earlier contractual terms. See: –

Joseph Maina Theuri v Gitonga Kabugi & 3 others where the court declined to uphold disciplinary rules and procedures that were not notified to the employee.
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Stay of implementation

The court may stay the implementation of the amendment until consultations are undertaken. See: –

Kenya Union of Commercial Food and Allied Workers vs Tusker Mattresses Limited; and
Kenya Local Government Workers Union vs Nyahururu Water & Sanitation Company Ltd
Other cases you may want to read through on the issue of changes to the contract: –

Kenya County Government Workers Union v Kisumu County Government & 95 others; and
Kepha Thuo Magua v Board of Governors Satima Secondary School
All cases can be accessed at http://kenyalaw.org/caselaw/

Mode of notification

The notification of the change may be done through a simple letter to the employee outlining the change or through an addendum to the contract. In either case, the employee should sign and retain a copy of the amendment and the signed acknowledgment should be kept in the employer’s records.

Summary

An employer should consult an employee prior to effecting changes to agreed terms and conditions of employment;
Consultation is mandatory, consent is not;
A change that is of a fundamental nature, if not consented to, may lead to a finding that an employee who resigns as a result of the change, has been constructively dismissed.
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