Changes in PIP (Performance Improvement Plan) Policy

My Company introduced the PIP policy before the start of the year (02.03.2016) with following criteria. This is to announce the commencement of the Performance Management process for the financial year 2016-17 . Over the last two years we have made several changes and now the process is well entrenched and stabilized . We are not making any further changes this year. Ratings for Last 2 years - 1/2 + H1 and FY16-17 – 1/2. In short Employee whose rating has been 2/1 for three consecutive years needs to undergo PIP/EXIT. Now all of a sudden after the year end in the month of July-2017 New PIP Policy has been introduced which mentions effective date 01.07.2017 with the below criteria, but the HR says that it is applicable for the Ratings of year 2016-17 as well. Which means it has retrospective effect and it is contradicting the earlier PIP Process. PIP should be initiated in following scenarios A) Annual Performance rating of the employee is ‘1’. B) Annual performance rating of the employee is ‘2’ with last year’s rating of ‘2’. Here as per the HR in short if the employee has been rated "1" for FY2016-17, then the employee needs to undergo PIP. I wanted to understand weather the Policy can be made by the company with retrospective effect or not?