How to change a contract of employment

24 September 2019
A contract of employment is a legal agreement between an employer and employee. It sets out the rights, responsibilities and duties of both parties including hours of work, salary and annual leave entitlement.
Image employment contract blog
It is not uncommon for contracts to require change from time-to-time. Whilst an employee is unlikely to complain when they’re given a pay rise or extra holiday, when changes are less favourable there are a number of steps you can take in order to implement the changes.

Flexibility clauses

When drafting an initial contract of employment it’s sensible to include flexibility clauses that enable you to vary specific terms of employment such as the hours of work, rates of pay or place of work. The clause will need to specifically set out:


  • the terms the employer can change;
  • the circumstances under which it can be changed;
  • any notice period and the process for the changes to be made.

Even if you’re happy the change is covered by a flexibility clause, it’s advisable to discuss with your employee before you implement it, as this can help prevent any ill feeling. 

Consult the employees 

If there are no flexibility clause in place then you’ll need to consult your employees before implementing any changes.

The consultation should be a two-way process where ideas are shared collectively and feedback is welcomed. You’ll need to explain why the change is appropriate and invite employees to discuss their concerns and also suggest ideas for an alternative. It is your responsibility to address all employee concerns and do everything you can to come to an amicable agreement. 

Sometimes employers may choose to offer incentives in exchange for a change of contract. These do not need to be pay-related and may include extra time off or flexible working hours. For example, if you need to move a member of staff from one office to one further away, you may offer flexible working hours to enable them to travel outside of rush hour. 

Once the changes have been agreed it is important to put them in writing. Whilst this is not a requirement for all changes, it’s advisable to help avoid any misunderstanding. Any changes to the following though must be put in writing:

  • Job title
  • Job description
  • Job location
  • Pay
  • Working hours
  • Holiday entitlement

Can’t reach an agreement?

Whilst it’s frustrating if an agreement cannot be reached, do not make any rash decisions by enforcing a change or dismissing and rehiring your employees, as they may be able to take you to an employment tribunal for breach of contract or unfair dismissal.

Ensure you have covered all bases, considered all options, followed all internal policies and sought professional legal advice before taking any action.

Summary

Consultation is the absolute key to any employment contract changes. Whilst you may have the ability to enforce changes with a flexibility clause, you’ve still got to work with your employees and you still want to get the absolute best out of them, so it’s always important to ensure all parties are happy with any change.

If you’re experiencing challenges making changes to your employee contracts, please get in touch with your local John Fowlers office at Colchester, Clacton-on-sea, West Mersea or Brightlingsea.