What To Do If Someone Refuses To Sign An Employment Contract
What To Do If Someone Refuses To Sign An Employment Contract

What To Do If Someone Refuses To Sign An Employment Contract

Many of us have been in the too familiar place whereby an employee does return their revised contracts of employment. In most cases, it is simply that the employee has forgotten or does not realise they need to sign it because they are actively working within the new role.

A simple email, call, or in person reminder can resolve the matter and the contract is returned and signed.

Some employees think they are being smart, by not returning the agreement if they are not happy with the role and think that by not signing they won’t be accountable, or agreeing to the terms but little do they know they may still be agreeing through a legal principle of ‘implied acceptance’.

As demonstrated in the case of “FW Farnsworth Ltd and another v Lacy and others” After the employee was given a promotion in 2009, where he was issued a new contract, that had revised termination restrictions, and additional benefits such as access to the company contribution pension scheme and private medical insurance.

Upon resigning in 2012, to work for a direct competitor, proceedings were brought against Mr Lacy to enforce the post termination restrictions – Mr Lacy argued that because he hasn’t signed and agreed to them, that they cannot be enforced.

The high court held the employee to the new terms and conditions and the termination restrictions, despite not signing and returning them, because it could be implied that he had accepted them given that he applied for the private medical insurance cover, that was only available to him under the new terms and conditions he was given.

That said, it is not recommended that employers rely upon implied acceptance as a Tribunal may not draw the same conclusion.

Other scenarios where contracts are issued such as a change in:

  • Workplace
  • Working Hours
  • Annual wage review
  • Revised covariance
  • Annual Leave
  • Terms of employment (Layoff clause/short-term working)

As of April 2020, employers must give a contract of employment or a written statement of particulars to the employee, and it is best practice for these to be reviewed on annual basis ensuring they are up to date with the ever evolving business world of today.

This can cause some challenges with employees who do not agree and should be able to be resolved informally through a face to face meeting.

In the event an employee doesn’t return their contract when chased or if the employee requests to check the contract, it is recommended the issuing Manager or HR member agrees to an informal meeting or asks to meet with the employee. (These meetings can take place on the phone, or if able via video call to be more personal, and in some cases reducing the tension and frustrations that employees have if you can see each other).

It is simply a ‘tea and cake exercise’ that they review any questions, understanding, or employee requests.

In many cases these can be resolved through understanding, and simple requests of added holiday entitlement and be agreed or declined taking into consideration any business presidency in place or setting.

If after explaining the reasons for the revised contract of employment the employee is still not in agreement, they can of course go down the grievance route to resolve the matter, but ultimately it is an offer of employment!, the employee doesn’t need to accept the offer of employment, but this could become risky and challenged for constructive dismissal.

Most of the time an agreement or compromise can be had through a grievance process, but the challenges become, if the employee does not want to agree, and legal proceedings commence.

The business needs to check and consider if an agreement can’t be met that these amendments are reasonable and fair, or do you need to compromise?

This is where as a business you need to think hard about how you can cut these risks before they occur through business communication, one on one meetings, before or when issuing revised contracts and even after if you think, or are aware that there may be questions.


How The Future Looks

With the recent pandemic, and the original unknown process of ‘Furlough’, there were many challenges, where there was no work, no way they could attend work and many HR Professionals and companies went running round trying to update their employee contracts with a layoff or short time working clauses to save the business, and this frightened employees and they just didn’t want to sign to have no pay.

Employees in some cases felt forced to sign these, as they could be dismissed without being offered alternative employment or packages.

We are yet to see the potential implications of these cases, as we move out of lockdown.

With the benefit of the Government Job Retention Scheme, and the unnecessary requirement to have the employee agreement this eased people’s minds, and potentially reduced some tribunal cases but the risks are still out there!

Ultimately with all the advice in the world, around issuing a contract and obtaining a signature it all comes down to the communication, and making sure the employee understands the training, and knows why you can’t agree or the needs for the amendments.

It is crucial that everyone understands their Terms and Conditions and can ask questions, to do a smooth transition for both parties.

To add a further curve into the mix, not all Terms and Conditions, need to be writing to be legal under British law, it is more beneficial to just give them in writing, as it is against the law to not!, for further information or If you have an employee with similar circumstances in this blog, please contact us via our online contact form or call us on the number below.

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