Making Changes to Employee Contracts
If you are thinking of changing an employee’s contract of employment, then it is worth noting that it is not something that can usually be done without the employee’s consent.
Changing an employment contract of an existing employee can sometimes land employers in ‘hot water,’ it is important that as an employer you only change a contract when it is reasonable to do so and have provided the employee with sufficient notice and enough time for the employee to consider the changes.
When can an employer change contract terms?
As an employer, you are able to make a change or variation to an existing employment contract if:
- There is a provision in the contract that allows for the change, which is often called a flexibility or variation clause, or
- By mutual or collective agreement, for example when the employee individually agrees to change, or where an agreement is negotiated between you, as the employer, with a trade union or staff association
If there is no contractual provision that gives you the right to change a specific term, then in most cases you must obtain the agreement of your employee, or the agreement of any trade union or other representative, if you want to vary an employment contract on a lawful basis.
What if an employer is removing an employee benefit?
When the employers change involves removing a benefit, an employment tribunal will more than likely see the case as ‘fair’ if there is something offered in return for the change, as an example this could be financial compensation and being given plenty of advanced notice before the change happens, in order for the employee to be able to plan ahead. In any change, the employer should not breach any equality laws when the contract terms change.
It is important for an employer to behave reasonably when making a change to an employee’s contract terms, and must also not leave an employee unable to perform the contract, for example asking an employee to relocate at an extremely short notice period with no payment of expenses.
An employer must not implement any contract changes that could breach their duty not to behave in a way that damages mutual trust and confidence, or the implied duty of good faith.
Where changes are made to an employee’s contract, employers must give written notification of the change within four weeks.
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At CP Law Associates, our employment legal team can help to guide you through the process of ensuring that your contracts are legally correct. Our team are able to review your contracts and provide you with advice to ensure that both the employer and employee’s are not at fault. Contact us for a free initial consultation. Contact Us
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