Can you change an employee’s contract?
As a business grows, it can become necessary to make changes. You might need to restructure roles, change working hours, introduce new responsibilities or change the location an employee works from. These sorts of changes might make sense to you and your business, but it’s not as simple as changing your employee’s contract and expecting them to accept it.
An employment contract is a legally binding document, so any changes need to be agreed between you and your employee.
Before you make any changes to an employment contract, here are five things to check and consider first:
What exactly are you changing?
You need to inform your employee of any intended changes and be clear about what you want to change and why.
Contractual changes you might make, could include:
Working hours or days
Salary or other pay
Place of work
Job title or duties
Holiday entitlement
Benefits
Notice periods
Working patterns.
It’s also worth looking into whether a contract change is definitely necessary as there are some instances where it’s not needed.
Go over your employee’s contract again
It might be a while since your employee’s contract was drawn up, so have another look at it so it’s fresh in your mind.
There may already be a clause in it covering the type of change you want to make. For example, some contracts contain flexibility clauses allowing an employer to make certain changes in particular circumstances. But, be warned, this doesn’t give you the right to make any change you want.
Have you consulted with your employee?
If the changes you want to make affect the employee’s contractual terms, then you need to consult with them and explain:
What you are proposing
Why the change is needed
When you would like the change to happen
What alternatives you have considered.
Give your employee an opportunity to ask questions, raise concerns and suggest alternatives, and genuinely consider what they say.
Good communication can make a significant difference. Employees are more likely to understand and support a change when they understand why it is necessary and feel that their views have been taken seriously.
It can also help you identify potential problems before the change is implemented.
What if your employee doesn’t agree?
If an employee does not agree to a proposed contractual change, don't assume that you can simply impose it as doing so could create legal risks. Instead, consider whether there is room for compromise or whether an alternative solution could be found.
For example, could a temporary arrangement work instead of a permanent contractual change? Could different working hours be considered? Is there another way of addressing the underlying business issue?
If you are unsure what to do when an employee refuses a proposed change, getting professional HR advice before taking action can help you avoid making an already difficult situation worse.
Put the change in writing
If you do reach an agreement with your employee, it’s important to put it in writing either via letter or email within one month of the change.
Make sure the employee is clear about:
What has changed
Why it has changed
When the change takes effect
Whether the change is temporary or permanent
How the change affects their employment.
Keeping a clear written record helps avoid misunderstandings later and gives both you and your employee a clear understanding of what has been agreed.
Knowing that a change is needed is one thing. Knowing how to implement it fairly and correctly is another.
Getting the process right from the beginning can help you avoid unnecessary disputes and protect the relationship between you and your employees.
We provide HR support for small businesses and can help you review employment contracts, advise on proposed changes and support you through the process, helping you make changes while reducing unnecessary HR risk.
If you're considering changing an employee's contract and aren't sure where to start, get in touch with us to discuss how we can help.