Vary a contract of employment

A contract of employment is formed when an offer is made, consideration is given and acceptance of the terms and conditions is affirmed. Employment contracts do not have to be written, although it is a requirement to give an employee a statement of written particulars outlining the key terms and conditions of employment within 2 months of the employee starting.

The employment contract may include express terms, which give the employer the flexibility to make important changes to the employment relationship including requirements to move employees to a different place of work or to undertake a different type of work.

Where flexibility has not been built into the employment contract parties must follow procedures to prevent a breach of contract.

Contract terms

Express terms are those which are expressed orally or actually written into the contract. Employers are legally obliged to put certain express terms in writing in the form of a 'written statement of particulars'. These include details such as job title, rate of pay, holiday entitlement and pension schemes.

Implied terms refer to conditions that are too obvious to mention or those which both parties would assume to be incorporated into the contract. These include statutory rights such as equal pay, minimum wage, sick pay and freedom from sexual, race or disability discrimination. There is also an implied term of mutual trust and confidence between employer and employee. Some terms may be implied through accepted custom and practice in a particular profession or with a particular employer such as dress codes.

Contract variations

Existing contracts of employment can only be varied under the following circumstances:

• Both parties must agree to the variation. This can be on an individual basis between the employer and employee or on a collective basis between the employer and representatives of the employee. Using collective agreement can be done where the contract allows for it either expressly, by implication or because of long standing custom and practice.
• Variations can be agreed verbally or in writing although written agreements are preferable so as to avoid any disputes in the future.
• An employer proposing a change in an employee’s contract must consult with that employee or his or her representatives and explain and discuss the reasons for the change. Changes must be justified and should be substantiated by a valid business need.
• If a variation referring to express terms included in the written statement of terms and conditions is agreed the employer must give the employee written notification of the change within a month of the change taking effect.
• An offer is made and the employees must be given a reasonable period of time in which to accept or reject the new terms and conditions.

If an employee rejects the new offer and the employer wishes to continue with the variation, then the employer may decide to terminate the contract by dismissing the employee with notice. The employer can then offer the job on the revised terms and conditions either to the dismissed employee(s) or to new applicants. The dismissed employee can make a complaint of unfair dismissal provided they have one year’s continuous employment service. In coming to a judgement an Employment Tribunal will take into consideration the reason for the variation in terms and conditions and the existence of meaningful consultation. If an employer simply attempts to impose a variation of contract on an employee without the employee's agreement, this will normally be a breach of contract. The employee can then:

• Do nothing and accept the new terms and conditions. If the employee makes no protest they will be deemed to have accepted the new contract conditions
• Pursue a breach of contract claim
• Resign and claim unfair constructive dismissal and or breach of contract