Can an employer change the date on which it pays its employees?

A change to the date on which an employer pays its employees will amount to a change to the terms of the employees' contracts. This means that the change will need to be agreed with the employees concerned before it is implemented. An employer that proceeds to make such a change without agreement will be acting in breach of contract, a course of action which could lead to resignations followed by claims of constructive dismissal.

An employer that wishes to change the date on which it pays employees should therefore consult all affected employees (or their representatives) with a view to reaching agreement on both the change itself and the way in which it will be implemented. If, for example, the change is from weekly pay to monthly pay, it may be appropriate for the employer to agree that, for a temporary period following the change, employees who might otherwise experience hardship may apply (within limits) for an advance on their pay.

Following consultation, if some or all of the employees involved still refuse to agree to the change, the employer may proceed to terminate those employees' contracts with full notice and at the same time offer re-employment on the revised terms. It should be made clear that the new contracts will run consecutively with the original contracts, with no loss of seniority or continuity of service. In this way, the employer will avoid breach of contract claims and, provided that it has acted reasonably throughout the process, will be in a position to defend any claims of unfair dismissal from those who decline to accept the offer of re-employment. This, of course, assumes that there was a sound business reason for the change in the first place.