How to change the terms of existing employment contracts

Author: Nick Robertson

Summary

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• Be clear about the reasons for making the change and ensure that there is a genuine business reason for it.
• Think about the process that will be needed and plan how long it will take.
• Check whether or not an obligation to consult collectively will arise if you end up dismissing and re-engaging, and how this will affect your timetable.
• Check the history of the employees' employment. If they have been subject to a TUPE transfer, it may be more difficult to vary their contracts.
• Look at the employees' contracts to see if there is a clause that authorises the change, but be aware of the limits of this approach.
• If operating a contractual clause that authorises the variation, consult employees and act reasonably.
• Keep in mind that obtaining the employees' express consent will always be the safest way to make contractual changes.
• Ensure that the changes and the reasons for them are fully communicated to employees, whether or not you need their consent.
• If employees consent to the change, confirm the new terms and conditions to them in writing.
• Consider whether or not to dismiss and re-engage employees who do not consent to the change.
• Consult collectively with employee representatives where required (or appropriate).
• In addition to any collective consultation that might be required, hold individual consultation and dismissal meetings with employees.
• Give employees the required notice of termination of their contracts.
• Offer the employees new contracts containing the revised terms.