Changes to Employment Contract

27 July 2020

There might be times when you’re required to change employment contracts.

Maybe you want to offer someone a permanent job or a pay rise. Or maybe you need to amend someone’s work location or responsibilities.

Whatever the reasons are, you must comply with employment rights and laws. If you neglect them, you could face legal claims–affecting both staff relations and brand name.

In this guide, learn about changing employment contracts; reasons for amendments; and whether notice periods are a legal requirement.

Can you make changes to employment contracts?

Employers can change employment contracts but you need to meet certain requirements beforehand.

There are three ways to consider first:

  1. The employee has agreed to changes after discussions.
  2. The employee’s representatives have agreed to changes after discussion.
  3. The employee has already signed a legal contract that allows changes.

Once they give consent, you can add, remove, or amend any contractual terms within reason.

What are the reasons for making changes to contracts?

There are lots of reasons for changing contract terms. Like, when you need to comply with a new law on national minimum wages. Or you want to change a fixed-term contract to a permanent one.

Other common reasons for change include:

How to make changes to an employment contract

The first step to consider is gaining consent from the employee.

Hold a formal meeting with them (or their representative) and discuss your reasons for change.

Keep your discussions clear and transparent. They should feel comfortable enough to raise concerns, without any fear of repercussion.

During the meeting, you should express

  • Your reasons for changes
  • Benefits for them and the business.
  • Legal rights during workplace changes.

After the meeting, present a written statement or letter. This should include what you’ve discussed, and further guidance on the matter.

Can a contract be changed without the employee’s consent?

You need mutual agreement to make changes to employment contracts lawfully.

Be careful when making them, as you risk causing misunderstandings–for the individual, and the wider business.

Other major risks include:

If you don’t follow an appropriate process, you could face legal penalties and business damages.

The only time to don’t require their consent is through variation clauses. These are contractual terms that state your right to make changes–if you have a good reason.

Like after meeting financial difficulties, or when new laws are passed.

You don’t need to seek prior permission if they’ve already agreed to a variation clause.

What if the employee doesn’t agree with contract changes?

In the end, there is a chance your employee might not agree to contract changes.

You must allow them to appeal but explain why your reasons are genuine.

If they still disagree, you could start a redundancy process–but only if it’s needed.

How much notice do you need to change a contract?

There isn’t a legal amount of notice you must give during contractual changes. Instead, provide a reasonable notice period (depending on individual cases).

For example, providing two weeks’ notice for contract changes if an employee requires training for a new role.

Making changes to employment contracts, without notice, can lead to claims of unfair treatment.

Get expert guidance on changing employment contracts with Peninsula

When you want to make contractual changes, it’s vital to gain mutual consent first. Employees are more likely to be understanding if you explain your reasons.

Without prior agreement, you could face costly penalties and business damages. And some might be hard to recover from.

Peninsula’s HR documentation and contracts team can guide you through the rules of making contract amendments.

Our 24/7 HR advice is available 365 days a year; with multi-lingual support and fully trained counsellors ready to help.

Want to find out more? Book a free consultation with one of our HR consultants. Call 0800 028 2420

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