How to change an employee’s terms of employment

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Employee Contract
At some point, an employer is likely to need to vary (amend) an employee’s Terms and Conditions of Employment.

This may be, for example, as part of a reorganisation where working hours are changing and the employer wishes to make the change. Alternatively, the employee may be looking to reduce their hours of work for family reasons.

It is possible to vary a contract of employment with the agreement of both parties, i.e. employer and employee. Changes can be agreed individually by employees or as a result of a collective agreement with a recognised Trade Union.

When “across the board” changes need to be made (such as due to a reorganisation), then consultation must be undertaken with affected employees or employee representatives. If an amendment to a contract is imposed unilaterally, the employer will be in breach of contract and employees may be able to make legal claims for constructive dismissal, breach of contract and/or unlawful deduction of wages.

An employer will need to consult meaningfully with staff or their elected representatives, with the aim of reaching agreement or a satisfactory compromise. The period of consultation should be “reasonable” and allow employees to contribute fully to the process. In most cases, 30 days is deemed sufficient although longer may be required for large scale changes.

In the majority of cases, a suitable agreement as to the way forward can be reached by involving employees in the discussion and considering a range of alternatives. Some employers offer incentives to encourage employees to accept changes, such as “buy out” payments. The emphasis should always be on listening carefully to employees’ points of view and responding appropriately and in a timely manner.

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