Cecily Zamora
Employment contracts are legally binding agreements between an employer and an employee, and any changes made to them must be agreed upon by both parties. Changes to an employment contract can be proposed by either the employer or the employee, and they may include updates to individual contracts or large-scale changes to shift patterns or working locations. While it is a breach of contract for an employer to impose changes without prior consent, there are certain circumstances in which an employer can lawfully alter the terms of a contract without an employee's agreement, such as through a flexibility clause or variation clause.
| Characteristics | Values |
|---|---|
| Who can propose changes | Both the employer and the employee can propose changes |
| When can changes be proposed | When the contract needs to be updated with new laws or regulations, or to better reflect someone's job role, or to introduce or change terms and conditions, or to reflect changes to an organisation |
| When can changes be imposed | When the employer has a flexibility clause or variation clause in the contract that allows them to change certain terms, or when the employee has agreed to a flexibility clause in the contract |
| When can an employee refuse a change | When the flexibility clause does not support the proposed change, or when the employee has not given prior consent |
| When can an employer dismiss an employee | When the employee does not agree to the proposed change, the employer may decide to make the employee redundant |
| When can an employee take legal action | When one of their statutory employment rights has been breached, or when their pay is reduced, or when the situation is unbearable |
| When must an employer provide a written statement | When the contract changes, the employer must provide a written statement within a month of the change |
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What You'll Learn
Changes to employment conditions
Employment contracts are legally binding agreements between an employer and an employee. Both parties can propose changes to the terms and conditions, but both must agree to the changes. Changes to the terms of employment conditions can occur for a variety of reasons, such as updating an individual contract, implementing large-scale changes to shift patterns or work locations, or adapting to new laws and regulations.
If an employer wishes to make a change, they must give the employee written notification of the details of the change(s) by, or before, the day the change takes effect. This must be provided no later than one month from the date of the change. If an employee disagrees with a proposed change, they can continue working under their original terms and conditions, but this may result in the employer deciding to make their position redundant. Employees can also propose changes to their contracts, for example, requesting better pay, but they do not have an automatic right to a pay rise unless it is outlined in their contract.
In some cases, an employer may have a flexibility clause or variation clause in the contract, which allows them to change certain conditions, such as shift patterns or job location. However, vaguely worded flexibility clauses cannot be used to implement unreasonable changes, as there is an implied term of mutual trust and confidence in all contracts. If an employer imposes changes without prior consent and without relying on a flexibility clause, it is considered a breach of contract, and employees are protected in such cases.
If an employee believes their employer has changed their terms of employment without notifying them, they should first address the issue directly with their employer or the HR department. If this does not resolve the problem, they can seek advice from organisations such as the Labour Relations Agency (LRA) or Advice NI, or take legal action, such as making an Industrial Tribunal claim or claiming constructive dismissal.
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Flexibility clauses
Employment contracts are legally binding agreements between an employer and an employee. Both parties can propose changes, but both must agree to them. Flexibility clauses, also known as variation clauses, are terms in a contract that allow employers to change specific conditions under certain circumstances. They can be general or specific. For instance, a general flexibility clause may allow an employer to change contract terms based on business needs, while a specific one might permit changes to working hours within business operating hours.
While flexibility clauses grant employers the right to change certain terms without requiring further agreement from the employee, they must be used judiciously. There must be valid business reasons for invoking them, such as fulfilling operational needs or making necessary economic cutbacks. Even with a flexibility clause, employers are expected to act reasonably and maintain an implied term of mutual trust and confidence. Vaguely worded clauses, such as "the employer reserves the right to change terms from time to time," cannot justify unreasonable changes.
If an employer intends to introduce a flexibility clause, they must amend the employment contract. Employees have various options for responding to proposed changes. They can consult with employee representatives, such as trade unions, and seek legal advice from organisations like the Labour Relations Agency (LRA) or Advice NI. It is important to note that changing employment contracts can carry risks, including decreased employee commitment, discrimination, and reputational damage. Therefore, employers should carefully consider the potential consequences and manage the process effectively.
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Mutual agreement
In some cases, a collective agreement with a trade union may be involved, where the union agrees to changes on behalf of the employees. This is particularly relevant when changes affect multiple employees, and it is more effective to discuss these changes with employee representatives. By law, recognised trade unions must be consulted if changes are made to terms and conditions they agreed to. Employees who are members of a trade union can seek help and support from their representatives during these processes.
Flexibility clauses, also known as variation clauses, within the contract can give employers the right to change certain conditions, such as shift patterns or job locations. However, vaguely worded flexibility clauses cannot be used to justify unreasonable changes, as there is an implied term of mutual trust and confidence in all contracts that requires the employer to act reasonably. If an employer wishes to make a significant change, they must provide written notification of the details by or before the day the change takes effect. If an employee disagrees with the proposed change, the employer might decide to make them redundant.
If an agreement cannot be reached, a more structured approach is to carry out a process of dismissal and re-engagement, often referred to as "fire and rehire". While this has received public scrutiny, it is a lawful option if handled correctly and can be considered fair if the employer has valid reasons and follows a fair procedure. However, Acas recommends this as a "last resort", emphasising the exploration of other alternatives first.
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Legal recourse
In the event of a dispute regarding changes to an employment contract, there are several legal options available to both employers and employees. It is important to note that changing an employment contract without prior agreement may constitute a breach of contract, giving rise to claims and damages.
For Employees
- If an employee disagrees with a change to their contract, they should first try to resolve the issue directly with their employer. This may involve following the grievance procedure outlined in their employee handbook.
- If the issue cannot be resolved directly, employees may need to seek legal advice and consider taking legal action. This could include making an Industrial Tribunal claim or claiming constructive dismissal, but it is important to note that employment law is complex and legal advice should be sought before taking any action.
- Employees can also contact organisations such as the Labour Relations Agency (LRA) and Advice NI, which offer free and confidential advice on employment rights issues.
- Employees who are members of a trade union can seek help, advice, and support from their union representative.
- If the dispute is regarding a change in employer, employees are normally entitled to receive a new full written statement of employment particulars within two months of the change.
For Employers
- Before making changes to an employment contract, employers should seek professional advice to ensure that the changes are lawful and that their interests are protected.
- Employers should also carefully consider the potential risks associated with changing contracts, such as decreased commitment and performance, discrimination, and reputational damage.
- If changes cannot be agreed upon with employees, employers may consider a process of dismissal and re-engagement, often referred to as "fire and rehire". This approach has received public scrutiny and should be a last resort, but it is a lawful option if handled correctly and with good reason.
- Employers should also be aware of their obligation to provide employees with a written statement of particulars, which includes specific information such as the employee's name, employment start date, holiday entitlement, place of work, and any requirements to relocate.
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Trade union negotiations
Trade unions are an integral part of the process of changing employment contracts. They represent employees and negotiate with employers on their behalf. This is particularly relevant when there is a collective bargaining agreement in place, which is an agreement between an employer and a trade union regarding the terms and conditions of employment for employees covered by the agreement.
By law, employers must consult with recognised trade unions when considering changes to terms and conditions previously agreed upon with the union. This is because trade unions have the power to negotiate and agree to certain contract changes on behalf of employees, as long as the collective agreement allows it. This can be done through oral agreements or 'custom and practice'. However, it is important to note that even if a union agrees to a change, it does not guarantee its legality, and there have been cases where union-backed changes were later deemed unlawful or discriminatory.
Trade unions can assist employees in proposing changes to their contracts. Employees may request amendments to their contracts for various reasons, such as a mismatch between their job role and title, requesting better pay or extra holidays, or seeking flexible working arrangements. Unions can negotiate these changes with the employer, aiming for a mutual agreement before the changes take effect.
During negotiations, employers must provide written notice of any changes to an employee's contract or main terms and conditions, such as working hours, minimum wage, or job location. This notice should be given at the earliest opportunity and no later than one month from the date of the change. If an employer fails to provide sufficient notice, employees may have grounds for a legal claim.
In summary, trade unions play a crucial role in negotiating and agreeing to changes in employment contracts on behalf of employees. They work to protect employees' interests and ensure that any changes are fair and reasonable. However, it is important for both employers and employees to seek legal advice and understand the complexities of employment law when making or agreeing to contract changes.
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Frequently asked questions
A lawful way to change an employment contract is to carry out a process of dismissal and re-engagement, often referred to as "fire and rehire". This involves terminating an employee's existing contract with notice and immediately rehiring them under the new terms. This method has received public scrutiny, so it should be a last resort after exploring other alternatives.
Flexibility clauses, also known as variation clauses, give employers the right to change certain conditions, such as shift patterns, or a "mobility clause", which allows changes to an employee's job location. These clauses cannot be used to bring unreasonable changes, as there is an implied term of mutual trust and confidence in all contracts.
Employment contracts may be changed to update them in accordance with new laws or regulations, to reflect changes in an employee's job role, or to introduce or change terms and conditions. Contracts may also be changed due to economic reasons, such as a business reorganisation or relocation.
If your employer changes your contract without your consent, you should first try to resolve the issue directly with them. If this does not work, you may need to take legal action, such as making an Industrial Tribunal claim or a claim for unlawful wage deductions. You can also seek advice from the Labour Relations Agency (LRA) or a solicitor.
Changing an employment contract can bring significant risks, such as decreased commitment and performance from employees, discrimination, valued employees leaving the organisation, and reputational damage.
