Varying the terms of an employment contract

Read our practical steps to varying the terms of an employment and download the accompanying fact sheet. 

Varying a Contract of Employment – Practical Steps

1. Review the Contract

• Does the contract authorise the change required
• If so, consider any contractual terms regarding variation of the contract

2. If the variation required is not authorised address the issue of what consideration the employee will receive in return for the variation. This may simply be their continued employment

3. Consult with the affected employees

• Discuss why the changes are necessary
• Consider the employees responses
• Warn employees about potential dismissals if appropriate

4. Seek the employee’s express agreement

• Is this is given make sure it is documented in writing
• If there is a trade union or employee representative body consider collective agreements or the need for collective consultation

5. Where express agreement cannot be reached consider dismissal

• You should warn and consult with the employees further in this regard
• Provide the employees with written notice regarding the potential dismissal
• You must act reasonably and dismiss for a potentially “fair” reason e.g. Redundancy or Some Other Substantial Reason

6. Formal termination

• Inform the employees in writing;
• Ensure you comply with any contractual and statutory notice periods;
• You should consider any collective consultation requirements that may apply;
• Ensure the procedure followed is fair and reasonable.

7. Offer re-engagement on new terms:

• Provide the new contract to the employees for their consideration;
• If they are in acceptance you should ensure the relevant contract is signed by all parties.

This checklist is not intended to provide legal advice.  Each case will depend on its own facts and if you are unsure as to how to proceed you should seek specialist advice before acting to seek to protect against any claims being made against you.

If the variation is related to or there has recently been a transfer of undertakings then there will be additional matters that should be taken into account and you should seek specialist advice to ensure your compliance.