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 TUPE transfer 

Employers should be careful if changing an employment contract when there’s been a TUPE transfer.

When an employee transfers there are other things to consider if the main reason for changing the contract is the transfer.

Find out more about TUPE.