HR · 4 March 2022

What You Need to Consider When Changing An Employee’s Contract

can i change employee contracts

The business landscape is continuously changing, and companies must keep up with those changes in order to remain profitable. Sometimes this may mean that you need to change your employees’ contracts to meet the evolving requirements of your business. This might leave you asking the question ‘can I change employee contracts?’

In the majority of circumstances, both the employer and the employee will need to agree on any changes that will be made to the contract of employment. However, there are always exceptions to the rule, so it’s important that you are aware of what changes are allowed and which will need to be agreed.

In this article, we’ll explain the legalities around changing employee contracts in the UK, including the circumstances under which you can change an employee’s contract and how much notice you need to give before doing so. We’ll also answer some of the most commonly asked questions regarding contract changes.

Can I Change Employee Contracts?

If a change in circumstances has left you needing to change an employee’s contract, you might be wondering how you can go about doing this. Typically, you’ll need to agree any contract changes with the employee. This means consulting with your employees and negotiating changes.

You’ll need to fully explain the reasoning for the change in order to get the agreement of the employee. You may also need to be prepared to compromise if the employee doesn’t agree with the proposed changes.

So, whilst it is possible to change an employee’s contract, you’ll usually need their agreement to be able to do so, and it might not always be easy to gain this consent. Having a sound reason for making the change and being open and honest with the employee can help to keep the channels of communication open so that you can reach an agreement that you are both happy with.

Is it legal to change a contract of employment?

A contract of employment is two way. It sets out the responsibilities of both the employer and employee, and both parties must agree to it. This means that a contract of employment can only be legally changed with the consent of both parties.

In some cases, the contract changes may be negotiated through a trade union. This is known as collective bargaining.

Employees can choose to accept a change. In fact, in the majority of cases the contract is being altered by mutual agreement. For example, a contract would be altered in mutual agreement when an employee receives a pay increase.

contract of employment

Contract changes – What are the employer responsibilities

If you’re considering negotiating a contract change with an employee, it’s important that you understand your responsibilities as an employer.

Firstly, you have an implied contractual duty to clearly explain any the impact that any changes to the contract will have. So, if the contract change will involve changes to salary, working hours or terms and conditions, you have a duty to clearly explain these to the employee so that they can make an informed decision as to whether or not to accept the changes.

Employers have a duty to act reasonably when it comes to making changes to the terms of an employment contract. This means that the employer should not leave an employee unable to fulfil the terms of their contract, for example dictating that the employee must relocate at short notice, without any expenses being paid.

Written notice of the contract change should be provided within four weeks. However, providing notice does not negate the need to mutually agree the contract change with the employee.

Finally, it’s also essential to ensure that equality laws are not breached when a contract change is requested. For example, it would be unlawful to reduce the hours of a pregnant woman as a result of her maternity status.

What constitutes a change in working conditions?

There are many different changes that might be made to working conditions. These can be requested by either the employer or the employee. Let’s take a look at some of the different changes in working conditions that may be requested by either the employer or the employee.

Contract changes requested by employer

There are many different types of contract changes that may be requested by an employer. These include:

  • Working hours (number of contracted hours or when those hours are worked)
  • Rate of pay
  • Location of work
  • Duties and responsibilities
It’s important to remember that these changes will need to be agreed with the employee before they can be added to the contract of employment.

Contract changes requested by employee

It’s not just the employer that can request a contract change; the employee can also request changes to their working conditions. Changes that an employee may request regarding their contract include:

  • Flexible working hours
  • Part time working hours
  • Different working hours
  • Improved working conditions
  • Increased pay
  • Increased holiday entitlement
It’s important to note that none of these changes are an automatic entitlement, unless the right is detailed in the employee’s contract. However, certain changes such as a flexible working request, must be considered by the business if requested by the employee, and should only be declined if there is a genuine business reason.

When do businesses need to make contract changes

When do businesses need to make contract changes?

There are many different occasions that may arise where a business finds itself needing to make changes to employees’ contracts of employment. These include:

  • To ensure that employment contracts comply with new legislation
  • To reflect a change in terms and conditions, such as enhanced maternity or paternity pay
  • To enable the organisation to adapt to the evolving business landscape and the needs of its customers
  • To enable the organisation to remain competitive in an evolving market
  • To reflect changes to the organisation, such as the business’ relocation

Can I change my employee’s hours of work?

A situation may arise where you need to change your employee’s hours of work. For example, if you work in retail and the store’s opening hours change, you need your employees’ working hours to reflect this.

However, it is essential that you properly consult with your employees before changing their contract of employment. During this process, you should give your employees the opportunity to raise any concerns that they might have with the changes and to find ways to mitigate these concerns.

If your employees refuse the proposed changes, it’s important that you seek legal advice before going ahead and making the changes. This is because the employee could bring a case at the employment tribunal for breach of contract if the correct process is not followed.

What if an employee refuses a contract change?

When an employer wishes to make a change to an employee’s contract of employment, the first thing to do is to consult with the employee. This means clearly explaining the change that is needed, as well as the reasoning behind the change. However, if the employee disagrees with the proposed changes, you might be wondering what to do next.


 
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