Types of employment contracts

Employment contracts come in several forms, including:

• Permanent contracts: Ongoing employment with no predetermined end date.
• Fixed-term contracts: Employment for a specific duration or until a particular project ends.
• Part-time contracts: employment contracts on a part-time basis
• Zero-hours contracts: Flexible work arrangements where the employer is not obligated to provide a minimum number of hours.

Read more: a guide to fixed-term contracts

Can an employer change your employment contract?

The short answer to this is that employers can change a contract of employment, but they have to do it in the right way in order for the change to be lawful.

Employers must follow the appropriate legal processes when seeking to change an employment contract. Any proposed changes should be reasonable, clearly communicated, and ideally agreed upon by both parties. Under the Employment Rights Act 1996, employees are entitled to written particulars of employment outlining key contractual terms.

When can an employer lawfully make changes?

An employer can only lawfully change your contract under certain conditions, including:

1. Where the contract of employment already allows the desired change; or
2. Where certain conditions are met (if the contract does not allow the change)

Where the contract of employment allows the desired change

If the amendment to the contract is authorised under the contract of employment then the employer can make the amendment when they wish. However, the employer will have to be careful that their interpretation of the contract (allowing the change) is the correct interpretation, or they may be breaching the employee’s contract by making the alteration.

Employers often insert a “flexibility clause” in a contract of employment which allows the employer to make specific changes to the contract of employment (for example, to change an employee’s hours or location)

Where the contract of employment does not allow the change

If the change is not allowed by the contract of employment then there are three ways that the employer can change the contract:

1. Getting the employee’s express agreement to the change(s) (whether individually or through a collective agreement) – this will generally mean that: there must be an offer of a change; the employee has accepted this change (without duress); and appropriate ‘consideration’ (i.e. a quid pro quo) has been provided. Only if all three of these elements apply will a change to a contract of employment in these circumstances be valid;
2. By the employer imposing the changes on the employee and the employee then accepting those changes through their conduct (implied agreement);
3. By the employer imposing the changes on the employee by terminating their employment and then re-offering employment on new terms (known as “fire and re-hire”)

Common reasons for contract changes

Business restructuring or financial deals

Employers facing financial challenges or restructuring may seek to amend contracts to reduce costs, increase flexibility, or avoid redundancies. Employers often seek to amend contracts to amend bonus agreements or commission agreements, for example.

Changes in job role or responsibilities

Adjustments to job duties often occur due to evolving business needs. However, substantial alterations must be agreed upon and aligned with the employee’s original contract.

Adjustments to pay, hours or benefits

Employers might propose changes to wages, working hours, or benefits to adapt to economic conditions. Such changes typically require employee consent and clear communication.

Legal and regulatory changes affecting your contract of employment

Employment contracts may need to be updated in response to new laws or regulations. For instance, changes to statutory minimum wage or working time regulations could necessitate contract amendments.

Employee rights and protections

What to do if you disagree with a change

If you disagree with proposed contract changes, consider the following steps:

1. Review the contract: understand the terms and whether the employer has a contractual right to make changes.
2. Discuss with your employer: engage in open dialogue to clarify the reasons for the change.
3. Seek advice: consult with an employment lawyer or trade union representative.
4. Object in writing to the change: if you object to the change you should ideally send your employer an email identifying what changes you object to and why. This will be useful to evidence your objection to the change at a later date, if necessary.

Consultation and negotiation with your employer

Employers should ideally consult with employees about significant contract changes. This process should be fair, transparent, and allow employees to voice concerns or propose alternatives. A failure to consult with employees can lead to unnecessary disputes, whereas consulting early and in a transparent fashion can mean that the requested changes are agreed quickly and without confrontation.

Protecting yourself against unfair changes

If an employer tries to impose changes without an employee’s agreement, employees may:

• Refuse to accept changes and work ‘under protest’: Continue working under the original terms.
• Raise a grievance: Use internal procedures to formally object via a grievance.
• Resign and claim constructive dismissal: If the change breaches fundamental contract terms, an employee may resign and claim constructive dismissal. You should only do this as a last resort, though, and certain conditions apply

Further reading: constructive dismissal – a guide for employees

Constructive dismissal – when changes lead to resignation

Constructive dismissal occurs when an employer’s actions fundamentally breach the employment contract, forcing the employee to resign. Employees must act quickly if pursuing a constructive dismissal claim, as strict time limits apply for bringing a case to an employment tribunal.

Steps to take if your employer changes your contract of employment

Review the changes and seek clarification

Carefully review any proposed changes and seek clarification where necessary. Ensure you understand the implications for your pay, hours, benefits, and job responsibilities and, further, understand what will happen if you reject the changes – is your employer threatening to fire you if you refuse them, for example?

Raising concerns with your employer

If you have concerns, raise them with your employer in writing via a formal or informal grievance.

Document all communications and request a formal meeting to discuss the changes. Try and resolve the dispute informally, if you can; if not, you can always make a formal complaint.

Seeking advice

Legal experts, such as employment solicitors, can offer you guidance and representation on your employment dispute if needed.

Taking legal action – bringing an Employment Tribunal claim

If the issue remains unresolved, you may consider filing an Employment Tribunal claim. Common claims involving contractual disputes include claims for breach of contract or constructive dismissal. Be mindful of the time limits for a constructive dismissal claim (usually three months from the date of the change or resignation).

Preventing disputes over contract changes

Importance of clear communication

Clear, open communication between employers and employees can prevent misunderstandings and disputes. Employers should provide advance notice and engage in meaningful consultation.

Seeking legal advice before signing a new contract

Before accepting changes, seek independent legal advice to ensure your rights are protected. This is especially crucial if changes impact key terms like pay or working hours.

Statutory Code of Practice on Dismissal and Re-Engagement

In the light of increasing scrutiny of “fire and rehire” exercises, the Conservative government first announced on 29 March 2022 that it would issue a new statutory Code of Practice to regulate the use of fire and rehire practices. This Code of Practice on Dismissal and Re-Engagement came into force on 18 July 2024.