Ask HR: Can I Change an Employee's Contract of Employment?

Lilac HR
11 hours ago
2 min read

The short answer is yes, you can, but there are key things you need to bear in mind when changing employment contracts.

Employment contracts are exactly that...contracts. So in order to change them, you need to have two things:

A good business reason for the change
Employee agreement

Reasons for Changing an Employee's Contract

An employee's contract may be changed following changes to business operations leading to the need for a contract adjustment such as a change in working hours or company benefits.

Employee performance and role changes may also lead to contract variations including job title, duties and reporting structures.

Other changes may come about as a result of legal changes such as pension auto enrolment or pay increases.

Best Practices for Changing Contracts

Regardless of the reason for the change, you will need to go through a change process:

Communicate the how, what, when and why of the change to the affected employees.
Provide an updated copy of the contract with the changes for the employee to review.
Provide the employee with time to review the changes and the opportunity to negotiate terms.
Obtain employee agreement to make the changes.

For large/multiple changes, it is advisable to allow extra time for the consultation period to allow employees plenty of time to review and confer with you.

Obtaining Employee Consent

You need to obtain employee consent for any contractual change. You can do this by asking them to sign a new copy of their contract of employment or their contract variation letter to express their agreement. Contract variation letters are suitable for individual, small changes such as a change in pay or working hours, however where multiple changes are being made to a contract, we recommend drafting a new contract for the employee to sign.

Tips for Managing Changes

Communication is going to be key for any change process. Employees will want to understand why things are changing and how it will impact them so be sure to tell them this clearly and consistently.

We also recommend creating clear structures and methods for employees to ask questions about the changes, either within individual consultation meetings or via another communication channel.

Where employees do not agree to the changes you are looking to make, we recommend contacting your HR advisers for support in how to manage this.

Have you got a burning HR question you want some help with? Submit your questions here.

Check out our How to HR Toolkit to guide you through HR with confidence.