Unilateral Contract Changes
The Principle of Mutuality
The principle of mutuality is a cornerstone in the law of contracts. It signifies that an agreement must be beneficial, understood, and agreed upon by both parties involved. Unilateral changes to a contract, especially employment contracts, often violate this principle, leading to legal challenges.
Employee Rights Regarding Contract Changes
In the Philippines, the Labor Code protects employees from unauthorized alterations in employment contracts. Employers generally cannot make substantial changes to essential terms like salary, job position, or working hours without the employee's consent. If an employer wishes to make such changes, the usual process involves obtaining the employee's written agreement to the modifications.
'Management Prerogative' and its Limitations
Although employers have a so-called "management prerogative" to change terms and conditions in the employment setting, this is not an absolute right. Any such changes must pass the test of fairness and must not discriminate against or unduly burden the employee. They should also adhere to any existing collective bargaining agreements or internal company rules.
Implied Changes and Conduct
Sometimes, even if there's no explicit agreement to a contract modification, an employee’s conduct may imply agreement. For instance, if an employer changes an employee's work schedule and the employee continues to work without complaint, a court may interpret this as implied consent to the change. However, this is highly context-specific and is generally not a safe route for employers to take.
Remedies for Unauthorized Changes
If an employer unilaterally alters contract terms without proper consent or fair reason, an employee may have several options. These could include filing a grievance, seeking mediation, or even pursuing a legal case for constructive dismissal if the change significantly disadvantages the employee.
Necessity for Legal Counsel
Given the complexities and potential implications of contract alterations, both employers and employees are strongly advised to consult legal experts before proceeding with any changes. Failure to do so can result in costly litigation and potential reputational damage.
Conclusion
The law aims to protect both parties in an employment relationship from unfair and unilateral contract changes. By understanding the rules and boundaries set forth by law, both employers and employees can navigate contract adjustments in a manner that respects mutual interests.