Is an employer allowed to unilaterally change employment conditions?
18 May 2022
Under certain circumstances, an employer may have an interest in changing an employee’s employment conditions. In principle, a change in the employment conditions requires that the parties reach an agreement. If the parties can’t reach an agreement, an employer has several possibilities to change the employment conditions unilaterally. Read in this blog more about changing the employment conditions unilaterally.
Changing employment conditions unilaterally
An employer can change the employment conditions unilaterally by invoking a unilateral changes clause or, if no unilateral changes clause has been agreed, by appealing to:
- Being a good employee (in Dutch: goed werknemerschap);
- Reasonableness and fairness;
- Unforeseen circumstances.
Each of the above possibilities is subject to strict conditions. The conditions for invoking a unilateral changes clause and for an appeal to being a good employee are explained below.
Unilateral changes clause
An employer can only invoke the unilateral changes clause if it has been agreed upon in writing. The clause can be included in the individual employment contract, the (incorporated) collective labour agreement (CLA) or in another collective arrangement (for example, the employee handbook). It must be clear from the clause which employment conditions can be changed unilaterally.
In addition, an employer can only invoke the unilateral changes clause if he has such a substantial interest in changing the employment conditions that it outweighs the interest of an employee.
- A substantial interest exists in case of important business or organisational circumstances, such as a reorganization. It must become clear that it is no longer possible for an employer to apply the current employment conditions;
- An employer his interest in changing the employment conditions must be so great as to outweigh, by the standards of reasonableness and fairness, the employee's interests which are harmed by the changes. Among other things, the type of employment conditions (primary, secondary of tertiary) and how much an employee will lose per year/month play a role in this consideration.
Being a good employee
If no unilateral changes clause has been agreed, an employer can under certain circumstances also unilaterally change the employment conditions by appealing to being a good employee. An employee should generally respond positively to reasonable proposals from an employer that are related to changing circumstances at work. An employee may only reject a proposal if acceptance can’t reasonably be expected of him. In short, the following three requirements must be met for an appeal to being a good employee:
- Circumstances at work must be changed;
- An employer’s proposal to change employment conditions must be reasonable. This depends on (i) the nature of the changed circumstances at work, (ii) the type and drastic nature of the proposal, and (iii) the position and interest of an employee in maintaining the employment conditions unchanged;
- Finally, an employee must reasonably be expected to accept the proposal.
If all these requirements are met, an employee is obliged to agree to an employer’s proposal to change the employment conditions.
Do you have questions about unilaterally changing employment conditions? Or do you wish to include a unilateral changes clause in your employment contracts? Feel free to contact one of our lawyers.