Are you as an employer allowed to unilaterally amend your employee’s working conditions?
An employment contract must be performed under the agreed working conditions, at the agreed time and place; any working conditions changes to the employment contract can only be made with the agreement of both parties.
However, given the employer’s right to supervise and control the employee(‘s work), the employer is entitled, within certain limits, to unilaterally change the employee’s working conditions.
Such changes may however not substantially affect essential working conditions. The following working conditions are considered as essential:
- Working time;
- Place of work;
- Function of the employee.
In the event where (one of) the above conditions is/are modified substantially and unilaterally by the employer, such a modification may be considered as a constructive dismissal, which entitles the employee to invoke a dismissal with immediate effect, with a severance indemnity. It is up to the party claiming the dismissal to factually prove the substantial change and judge to assess whether such a change constitutes a will to terminate the employment contract.
In a recent interesting case, the Labour Court of Liège applies the above principles to various changes of essential employment conditions.
Facts of the case
An employee has been working as a sports and administrative coordinator since 2010. The employer has in the meantime provided the employee with a company car and a monthly allowance of 250 EUR for the use of his private office at home.
In 2017, the employer underwent a significant reorganization, in the framework of which it presented a new job description and a new place of employment (10 km away from the previous one) to the employee, which was accepted by the employee. The employee was also placed under supervision of another employee, who directly reported to the Board of the company. The employee therefore had no direct contact with the board anymore.
After a long sickness, the employee came back to work. The employer then terminated the 250 EUR monthly allowance as the employee would have an office on the new site of the company. The employee subsequently claimed that the employer had unilaterally and substantially changed essential working conditions (place of work, salary and function). He therefore invoked constructive dismissal and claimed a severance indemnity.
Decision of the court
After highlighting the principles of a constructive dismissal the Court judges that:
- An employer can amend the way work is organized and work is controlled by promoting one employee and placing him hierarchically above another, as long as no substantial change has been made to employee’s function. In our case, the employee did not prove that his function changed drastically;
- A modification of the work place of 10 km does not constitute a substantial change, especially if the employee has a company car. Moreover, the employee was the only employee left working at the previous site. It was, according to the court, legitimate to consolidate all of the company’s activities on the same site;
- The employer was entitled to withdraw the home office allowance because it (1) does not constitute salary (it is merely a reimbursement of costs) and (2) parties agreed to the possibility to withdraw the home office allowance with a notice period. The employer had in addition proven that this allowance was no longer justified since the employee had received an office.
Relevance of the decision
In this case, the Court, acknowledges the freedom of organization of the company, and recognizes the right to modify the company’s organization by placing an employee hierarchically above another to the extent the employee’s function is not unilaterally and substantially amended. Do note that some case-law does not follow this interpretation. The fact that the employee agreed with his new function description has certainly had an influence on the Court’s decision.
Employers should therefore always be careful when unilaterally amending its employee’s working conditions. Although it is always a matter of fact, we can highlight the following trends in case law:
- Constructive dismissal: demotion, unjustified withdrawal of the company car, loss of commissions following a change of a sales agents’ status, change of the place of employment of 100 km or leading to a significant rise in commuting time, shift from a night work to day work, etc.
- Not a constructive dismissal: transfer from the place of work which does not lead to a significant higher commuting time, temporary change of function if it does not lead to a lower salary, changes in the function due to the company’s organization, modification of the work schedules resulting from the nature of the function of the employee etc.
If you would like more information on this topic or if you a faced with a potential modification of your employee’ working conditions, Pro-Pay can advise you on this matter.