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Business needs change, whether through growth, restructuring, economic pressures, or operational shifts. When these changes affect how employees work, it may become necessary to amend the terms and conditions of employment contracts.
However, making changes to employment contracts must be handled lawfully and sensitively. At Franklins Solicitors, we help employers through this process with confidence, ensuring legal compliance and minimising disruption.
Employers may wish to vary employee contracts in a range of circumstances, such as:
Whatever the reason, contractual changes must be handled correctly to avoid breaching employment law or damaging employee relations.
No. Employers cannot change the terms of an employment contract without employee agreement, unless the contract specifically provides for certain changes (e.g. mobility clauses or flexible hours).
Even where a contract includes such clauses, they must be applied reasonably. For example, requiring an employee to move to a different worksite hundreds of miles away at short notice is unlikely to be lawful, even if a mobility clause exists.
There are three main ways an employer can lawfully change terms and conditions:
The safest and most straightforward approach is to consult with the employee and gain their express consent to the proposed changes. This should be documented in writing and form part of the revised employment contract.
Where trade unions or staff representatives are recognised, contract variations may be agreed collectively through formal negotiation processes.
As a last resort, an employer may choose to terminate the employee’s existing contract and offer re-employment under the new terms. This is known as “fire and rehire” and is highly sensitive, carrying risks of:
Legal advice is essential before proceeding with this route.
Consultation is not just good practice — it’s a legal requirement in many situations. Employers must:
If 20 or more employees are affected within a 90-day period, collective consultation rules apply under the Trade Union and Labour Relations (Consolidation) Act 1992. Employers must:
Failing to comply can result in a protective award of up to 90 days’ pay per employee.
Changing employment terms without proper legal advice or consultation can lead to:
Even if changes are commercially necessary, poor handling of the process can escalate quickly into expensive disputes.
We provide employers with tailored, legally sound strategies for:
We also work with HR teams to ensure internal processes are aligned with legal best practice.
Maintaining compliance is crucial to avoid disputes, claims, or even legal action from employees. It also ensures a fair and transparent working environment that can boost employee morale and productivity.
Businesses must ensure changes are not discriminatory and are communicated clearly to employees. Employers are required to seek agreement to the changes and maybe even consider terminating the existing contract before re-engaging the employees on new terms. Where it is proposed to dismiss (and re-engage) 20 or more employees, employers may need to engage in collective consultation.
Generally speaking, an employment contract is a legally binding agreement. Once it is made, both employer and employee are bound by its terms. At common law, a contract may only be amended in accordance with its terms or with the agreement of all parties.
Common concerns include lack of clear communication, potential breach of contract claims, negative impact on employee morale, and possible redundancies if changes aren’t agreed upon.
The starting point is the employment contract and interpreting existing terms to ascertain if changes are authorised by the contract. Further consideration is required to be given and includes seeking the employee’s agreement to the proposed changes.
If you have any questions about employment law, please don’t hesitate to contact our team of experts who are on hand and ready to help you.
