Five Questions Every Employer Should Ask When Making Changes to Employment Contracts in England

When you employ staff to work for you, you should have an employment contract with each employee. Employment contracts are legally binding agreements that state your and your employee’s rights and responsibilities in the workplace. However, employment contracts may need to be amended from time to time to reflect changes in employment, such as a change in your employee’s job role. Therefore, you must be aware of any processes and issues relating to changing employee contract changes to ensure that you change them correctly. This article will answer five questions every employer like you needs to know when making changes to employment contracts in England.

1. Should I Consider Whether Employment Contract Changes Are Appropriate?

If you are considering making changes to your employees’ employment contracts, it is good practice to pause before starting the process. Amending employment contracts is a lengthy process, and you must carry out a series of steps when doing so. Therefore, before making changes to your employee’s employment contracts, you should:

• consider the issue at hand to which you need to find a solution; and
• think carefully about whether an employment contract change is the best way to resolve it.

As you need to inform and consult with your employees as part of the employment contract change process, pausing before making changes enables you to demonstrate that you considered other options. Ultimately, you may be able to resolve the issue in a different way. For example, if you need to reduce business outgoings, you might change to a cheaper supplier rather than reduce your employee’s work hours.  

2. What Can I Change in Employment Contracts?

There are many reasons why you may wish to or need to change part of your employees’ employment contracts. For example, you may need to change the contract to reflect changes to your employee’s job role, such as:

• their working hours;
• their days of work;
• a flexible working arrangement;
• a change to tasks in their role;
• new terms and conditions of employment, such as enhanced maternity leave;
• changes to your business, such as your location; 
• ensuring your business meets demands; and 
• other economic reasons. 

3. Do I Need to Follow a Set Process?

If you are making employment contract changes, you should follow a specific process. This can increase the likelihood that you will make the changes correctly. Additionally, following a process will likely increase the chance that your employees will agree to the contract changes.

When making employment contract changes, you should:

• propose the employment changes to your staff;
• consult with your staff about the employment changes; and
• once you have agreed upon the change, take steps to put the changes in writing and monitor them.

4. Do I Need My Employee’s Consent?

You must get your employee’s agreement when changing their employment contract. You may also need to seek their representatives’ consent, such as their trade union. 

There are different ways you may get employees or their representatives to agree to your employment contract changes. For example, you may:

• discuss and decide on the change with your employees;
• agree with the trade union who will speak to your employees on your behalf where a collective agreement is in place;
• use a flexibility cause or variation clause in your employment contracts, which means that your staff agree in advance that you can make specific changes to their contracts; or
• rely on implied changes that arise over time through custom and practice.

5. Are There Risks Associated With Making Employment Contract Changes?

If you are planning on or are already making changes to your employees’ employment contracts, you must be aware of the risks associated with doing so. Risks include employment law risks and the relationships between you and your staff, so you must change employment contracts correctly. For example, changing employment contracts can:

• lower staff morale;
• reduce staff performance;
• cause anxiety and stress amongst your employees;
• drive an increase in staff absence;
• give rise to employment claims for unlawful discrimination or constructive dismissal;
• damage your business’ reputation; and 
• encourage industrial action, such as strikes.

Key Takeaways

If you consider making changes to your employees’ employment contracts, there are many questions you may have. Nevertheless, you should:

• consider whether changing the employment contract is appropriate for resolving a workplace issue;
• decide whether your proposed change is lawful;
• follow a consultative process; 
• seek your employees’ agreement; and
• consider the risks associated with employment contract changes. 

If you need help making changes to employment contracts in England, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.

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