Can my Employer Change the terms of my Employment Contract?

Employment contracts form the foundation of the relationship between employers and their employees. They outline the terms and conditions of employment, including salary, working hours, duties, and benefits. Understanding the legal framework and implications of amending employment contracts is crucial for both employers and employees.

In England and Wales, it is possible to make amendments to existing terms of employment contracts, but the process is governed by specific legal principles. Employment contracts cannot be unilaterally altered and require the consent of both parties involved, except in specific circumstances.

1. Mutual Agreement: The most straightforward way to amend a contract is by agreement. Both parties discuss and agree upon the changes, which are then documented in writing. This method ensures that both the employer and employee are clear about the new terms and conditions.

2. Collective Agreements: In some workplaces, changes to employment contracts can be made through collective agreements negotiated between the employer and a trade union. These agreements can bind all employees covered by the agreement, provided that the proper negotiation and consultation processes are followed.

3. Flexibility Clauses: Some employment contracts include flexibility clauses, which allow employers to make certain changes without requiring consent from employees. However, employers must ensure that any changes made under a flexibility clause are reasonable and the employee is given plenty of notice.

Legal Considerations and Limitations

1. Communication: Effective communication is essential. Employers should engage in consultation with employees, explaining the reasons for the proposed changes and addressing any concerns. Failure to consult can lead to disputes and damage employee relations.

2. Fair and Reasonable: Any amendments must be fair and reasonable. Changes that significantly disadvantage the employee, such as a substantial reduction in pay or increase in working hours, may be deemed unreasonable and could be legally challenged.

3. Constructive Dismissal: If an employer imposes changes without the employee’s agreement, the employee may have grounds to claim constructive dismissal. Constructive dismissal occurs when an employee resigns in response to the employer’s conduct, which amounts to a breach of contract. In such cases, the employee may be entitled to compensation.

Practical Advice

Both employers and employees are advised to seek legal advice before making or agreeing to any significant changes to employment contracts. This ensures compliance with employment law and minimises the risk of disputes.

If you find yourself in this situation, Leeds Day can assist by:

1. Reviewing the current contract to identify any flexibility clauses and understanding the legal framework governing the contract.

2. Assisting the parties in explaining the rationale for the proposed changes and negotiating an agreement.

3. Ensuring that any agreed changes are documented in writing and signed by both parties. This provides a clear record of the new terms and conditions.

Conclusion

Amending an employment contract is a process which requires careful consideration and mutual agreement. Employers must navigate legal requirements, consult with employees, and ensure that any changes are reasonable and fair. By following these principles, employers can effectively manage contract amendments while maintaining positive employee relations and compliance with employment law.