The short answer is no, not necessarily.
The Court of Appeal in Abrahall vs Nottingham City Council heard that the City Council had brought in a new pay system to regularise a host of pay systems. Shortly thereafter the Council brought in a two year pay freeze. There was no industrial action (there was a consultative ballot) and no affected employee raised a grievance. Then Nottingham City Council proposed an extension of the pay freeze. Unions then activated a collective grievance procedure.
The main issue was whether the employer could assume that the employees accepted the variation in their contracts by working for two years under the pay freeze.
The Court of Appeal ruled that the employer should not assume this. The Court also issued a number of principles on whether acceptance should be inferred, including:
- Where the variation is wholly disadvantageous, acceptance is less likely to be inferred (as it was in this case)
- The question is to be determined objectively
- Acceptance of a variation of contract should only be inferred from conduct where that conduct brooks no other reasonable explanation save for acceptance
In conclusion the Court of Appeal found that the employees were contractually entitled to annual incremental pay progression.
The opinion of Payroll Masters is that clear communication with employees is always in the best interests of a good relationship between employer and employees and this has many underlying benefits. To discuss any aspect of your payroll please contact one of our friendly, Birmingham based head office payroll professionals.