22 March 2013
Changes to Employment Terms and Conditions
Can I unilaterally change an employee's job position or remuneration?
An employer cannot do this without the employee's agreement unless under one of the following circumstances:
- the employee is incapable of performing his or her original duties;
- the original duties specified in the employee's labour contract can no longer be performed due to a major change in the objective circumstances which were relied upon when the contract was concluded; or
- at the end of a period of medical treatment for an illness or non-work related injury, the employee is incapable of performing his or her original duties.
Even if the labour contract contains an express provision permitting unilateral changes to the employee's job position, such a clause cannot be relied upon in all instances.
How can I unilaterally change the job position or remuneration of an employee?
In addition to falling within one of the three circumstances set out above, if an employer intends unilaterally to change an employee's job position or remuneration, it is required to have sufficient evidence to prove the "reasonableness" of the change (e.g., the new job position assigned to the employee is related to the employee's original role and he/she is qualified and capable of handling the duties under the new position).
Although the law is silent on what may be considered in determining "reasonableness", and this is at the discretion of the arbitrators or judges, we recommend that you at least consider the following:
- whether there are internal rules and policies setting out the details of job duties of various roles and posts, the performance standards and review procedures;
- whether these internal rules and policies have been properly introduced through the "democratic process" required under Article 4 of the Labour Contract Law; and
- whether there are procedures for changing job roles and remunerations.
In addition, we advise you to document the relevant evidence for the process of lawfully changing the job position and/or remuneration of an employee.
Can I unilaterally change the employee's job location?
No, you cannot do this. As with changing an employee's job position and/or remuneration, any change of job location would also amount to a material variation of the labour contract and therefore would require the employee's agreement recorded in writing.