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Variation of contracts

Updating author: Jeremy Fitzgibbon


  • Neither party has an automatic right to change the contract terms, even when they are out of date or inconvenient. (See No implied power to change the terms)
  • Terms can be changed only if the parties agree to the change or the change is in accordance with a contract term. (See Discretionary and flexible terms)
  • If the contract does not provide for the change the employee's consent is needed. (See The agreement of the parties)
  • In the absence of the employee's consent the employer may decide to dismiss the employee and re-engage him or her on the new terms. If the employer has a good business reason for the change and follows a fair procedure this should not be an unfair dismissal but will be justified as some other substantial reason for dismissal. (See Dismissal and re-engagement)
  • If the employer is dismissing and re-engaging in order to change the terms this will be a redundancy dismissal for the purposes of collective consultation and the employer must comply with the collective redundancy consultation procedure or risk the payment of a protective award. (See Dismissal and re-engagement)
  • Where there is a transfer of an undertaking, a purported variation of an employment contract is void if the sole or principal reason for the variation is either the transfer itself or a reason connected with the transfer that is not an economic, technical or organisational reason entailing changes in the workforce. (See Transfers of undertakings)

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