Can You Change an Employee’s Contract?

Can You Change an Employee’s Contract? 

Changing an employee’s contract isn’t something you can do on a whim. Whether you need to adjust working hours, pay, job roles, or benefits, contract changes must be handled correctly to stay compliant with UK employment law and maintain trust with your team.

So, can you legally change an employee’s contract? Yes—but only under the right conditions. Here’s what UK employers need to know about when, how, and why you can make contract changes without causing legal issues or damaging morale.

When Can You Change an Employee’s Contract?

Employment contracts are legally binding agreements, meaning you can’t unilaterally change them without consent. However, changes may be possible in the following situations:

✅ Mutual Agreement: The easiest way to change a contract is when both employer and employee agree to the new terms in writing.

✅ Contractual Right to Change: Some contracts include a variation clause, allowing certain changes (e.g., shift patterns) without full agreement—though these must be reasonable.

✅ Collective Agreements: If contracts are covered by a trade union or staff agreement, changes may be negotiated through collective bargaining.

✅ Business Need Justifies a Change: In rare cases, employers may enforce changes due to genuine business needs, but this should be a last resort. I'd suggest you seek professional advice before going down this route as it can be risky. 

What Types of Contract Changes Are Common?

UK employers often need to adjust contracts for business or operational reasons. The most common changes include:

📆 Working hours and shift patterns (e.g., switching from remote to office-based work)

💰 Pay and benefits (e.g., salary increases, new commission structures)

🎯 Job duties and responsibilities (e.g., adding new tasks to a role)

📍 Location of work (e.g., requiring employees to work at a new office)

📜 Company policies (e.g., amending redundancy procedures or sick pay policies)

How to Change an Employee’s Contract Legally & Fairly

If you need to make changes, follow these steps to stay compliant and keep employees on board:

1. Review the Existing Contract

Check if the current contract already allows for changes through a variation clause which can be applied. If not, changes will require agreement from the employee.

2. Communicate Clearly & Early

The way you communicate changes is just as important as the changes themselves. In some situations, you may require formal consultation, which requires you inviting an employee to the meeting and giving them the right to bring a colleague or trade union representative. It's best to be upfront about:

  • Why the change is necessary e.g. to avoid redundancies 

  • How it benefits the business and the employee

  • When the change will take effect

3. Seek Employee Agreement

You should get written agreement from the employee before making changes. Employees may:

✅ Accept the change
✅ Negotiate new terms
❌ Reject the change

If an employee refuses, you cannot force the change without risking legal consequences.

4. Offer Incentives or Compromises

If employees resist, consider offering incentives to gain agreement. This could include:

  • Additional benefits (e.g., extra holiday, bonuses)

  • Extended notice periods for the change to take effect

  • Gradual implementation to allow employees time to adjust

5. Provide a Written Update

Any agreed contract changes must be confirmed in writing within one month of taking effect. This ensures legal compliance and avoids future disputes. This can be done by issuing a new contract or a contract variation letter which they sign.

What If an Employee Refuses a Contract Change?

Employees have the right to refuse changes, and enforcing changes without agreement can lead to grievances, resignations, or legal claims.

If an employee doesn’t agree, your options include:

💬 Negotiation: Try to find common ground.

💼 Changing the role under new terms: If agreement isn’t possible, you may need to offer a new contract and role.

⚖ Dismissing and re-engaging (last resort): If a critical business change is necessary, you can dismiss employees under their old contract and offer re-employment under new terms. However, this carries legal risks and must be handled carefully to avoid unfair dismissal claims. I'd suggest you seek professional advice before going down this route as it can be risky. 

Key Legal Risks of Changing Contracts Without Consent

❌ Breach of contract claims – If changes are forced, employees can claim breach of contract.

❌ Unfair dismissal claims – If an employee is dismissed due to contract changes, they may claim unfair dismissal if they have at least 2 years’ service.

❌ Constructive dismissal claims – If changes significantly disadvantage an employee (e.g., a pay cut), they may resign and claim compensation.

To Sum Things Up

📜 Changing an employment contract is possible but it must be done legally and fairly.

Employers should always aim for mutual agreement, communicate openly, and document changes properly. Forcing changes without consent can lead to serious legal consequences.

 

Resources

💡 Free Guides & Tools

🛠️ Paid Resources & Support

  • Contract Templates – Ready-to-use, legally compliant redundancy documents.
  • HR Advice - Got questions about staff contracts? Pick my brains and choose either 30 or 60 mins with me via Zoom to get your questions answered. 

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