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Help for small firms

The new employee's contract: A step-by-step guide

The new employee's contract - Step 3

If you need to change a contract

Contracts can only be changed with the agreement of both the employee and the employer so you need to:

  • talk to your employee/s and try and reach an agreement. This is by far the best way forward
  • explain the reasons behind the change - this may help them to accept your decision
  • agree any changes. This can be done verbally or in writing, but to avoid future misunderstanding you should but it in writing. You must also provide a written statement detailing the changes to their Written Statement of Terms and Conditions of Employment within one month of the change taking effect.

But if you can't agree to a change to your employee's contract, you have three options.

  1. Impose the change, but the employee could claim for breach of contract at a civil court or for constructive dismissal or unfair deduction of wages at an employment tribunal.
  2. Terminate the existing contract and offer to re-engage the employee on the new terms. If the employee has been working with you for two years (or one year if they started with you before 1 April 2012) they could claim unfair dismissal.
  3. Keep talking and try to reach a compromise. You might be able to offer the employee an incentive to agree to the change.

For more information see the Acas Advice leaflet - Varying a contract of employment.

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