Changing an employment contract

Consult employees to agree changes

Open discussion with employees about changes to their contract helps:

  • employers and employees work together to agree changes
  • prevent potential disagreements or legal disputes

Consulting employees 

If an employer needs to change a contract, the first step is to talk with employees (or employee representatives like a trade union). 

Before consultation

Before consulting employees, it’s a good idea for employers to think about:

  • why they need to make a change
  • what they need to achieve by making a change

During consultation

Consultation should be a two-way process where ideas are shared and worked on together.

The employer should: 

  • explain the reason behind making the change 
  • invite employees to talk about their concerns and suggest ideas for alternatives 
  • listen to employees’ concerns and consider their ideas
  • do everything they can to resolve any employee concerns

The employee should:

  • consider the proposed change and reason for the change
  • share their views, concerns and any ideas for alternatives with the employer
  • continue to talk to the employer about any concerns
  • make sure they have tried all options to reach an agreement 

Consulting trade unions

Consulting with trade unions or employee representatives openly and honestly can help to:

  • have meaningful discussions with employees
  • get a better understanding of employee concerns

Sometimes there is also a legal obligation to consult trade unions.

Consider all alternatives

Considering all options and asking employees for ideas can help agree a change. Employees might suggest something the employer had not thought of. 

Depending on the proposed change, employers might consider:

  • asking for volunteers (if the change might suit some employees more than others)   
  • offering incentives to employees
  • taking on some of the employees’ ideas

Incentives do not have to be pay-related, for example, an incentive could be:

  • extra leave or time off
  • help with travel costs for a time if employees will have to travel further to get to work

If there has been a business transfer (TUPE) 

Employers should be careful if changing a contract of employment when there’s been a business transfer (TUPE).

When an employee transfers there are some special protections and rules about the terms and conditions in their contract.

In these circumstances, it’s important employers consider getting legal advice before making a change.

Find out more about TUPE.