It is a legal requirement for an employee to be given written terms and conditions of their employment and these must be provided on their first day of employment, or earlier. An employee’s terms of employment are bound to change in several ways during their employment. For example, annual pay increases and promotions will constitute changes to the employment contract. However, these types of changes will normally happen by mutual consent and are unlikely to cause any legal or practical problems for employers.

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It is a legal requirement for an employee to be given written terms and conditions of their employment and these must be provided on their first day of employment, or earlier. An employee’s terms of employment are bound to change in several ways during their employment. For example, annual pay increases and promotions will constitute changes to the employment contract. However, these types of changes will normally happen by mutual consent and are unlikely to cause any legal or practical problems for employers.

  • Specific changes to an individual’s contract of employment. Such as changes to pay rates, bonus and commission structures, restrictive covenants and the place where an employee is required to work. Such changes are often brought about by changed economic circumstances resulting in a need to reorganise the employer’s business
  • Varying terms as part of a general programme of harmonisation of terms of employment across the business. Such changes are not necessarily brought about by a specific business need, but because there is little or no consistency in an employer’s employment contracts, and there is a desire to move all employees onto standard terms of employment (appropriate to their role and seniority)

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Such housekeeping exercises also give employers the chance to ensure that their standard contracts are:

  • Legally compliant.
  • Appropriate to the size and structure of the business
  • Providing a reasonable level of legal protection for the employer

When making formal changes to an employment contract, the employer has three principal options:

  • To seek agreement to the changes and dismiss those employees who refuse to agree. The employees who are dismissed may have claims for unfair dismissal and (if the employer does not serve notice) breach of contract
  • To terminate the existing employment contracts and offer re-engagement on the new terms. The employees may have claims for unfair dismissal and (if the employer does not serve notice) breach of contract, but the offer of re-engagement may mitigate their loss. In addition, there may be collective consultation obligations
  • To impose the changes and leave it to the employees to decide how to respond. This may result in claims of constructive dismissal in addition to other claims

Whenever a business changes terms and conditions for its employees it can cause a period of unease. Making sure you undertake the correct consultation procedure can alleviate some of the strain. Our solicitors can assist you with all stages of changing your business’ employment contracts. We can draft the terms and conditions, assist you with consultation and support you through any disputes that may occur.

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