In short
Pay, hours, duties or place of work: when an employer can change an employee’s terms, how to do it properly, and what to do if a change is imposed.
A new rota. Fewer hours. A different job title, a move to another site, a change to how commission is paid. Businesses change, and jobs change with them. But a contract of employment is an agreement, and one side can’t simply rewrite it.
Whether you run a business or you’re the one being asked to accept a change, this is how it works.
Why an employer can’t just decide
Your contract of employment isn’t only the document you signed. It can include terms agreed verbally, terms in a staff handbook that are meant to form part of the contract, and terms that have become established through long and consistent practice.
The general rule is that the terms of a contract can only be changed with the agreement of both sides. If an employer imposes a change to a contractual term, such as pay, hours or place of work, without that agreement, it will usually be a breach of contract.
Not everything at work is a contractual term, though. An employer can normally give reasonable instructions and change policies, working practices or the way a job is done, as long as it isn’t altering the contract itself. Where that line falls depends on the wording of the contract and the facts, which is why it is worth checking before anything is changed.
How a change can be made properly
- By agreement. The simplest and safest route. Explain the reason for the change, consult, listen to the response and record what is agreed in writing. Offering something in return, such as a one-off payment, can help.
- Using a flexibility clause. Some contracts allow the employer to vary certain terms, such as shift patterns or place of work. Tribunals read these clauses narrowly: the clause has to clearly cover the change being made, and it has to be used reasonably.
- Through a collective agreement. Where terms are negotiated with a recognised trade union and form part of individual contracts, changes can be agreed through that process.
Once a change to an employee’s main terms has been made, the employer must tell them in writing, no later than one month after the change.
What about “fire and rehire”?
When employees won’t agree, some employers consider ending the existing contracts with notice and offering new employment on the new terms. This is often called “fire and rehire”, or dismissal and re-engagement.
It is a high-risk step:
- it is a dismissal, so employees with enough service can bring a claim for unfair dismissal;
- a statutory Code of Practice on dismissal and re-engagement has applied since July 2024, and a tribunal can increase an award by up to 25% where an employer unreasonably fails to follow it;
- if 20 or more employees at one establishment could be dismissed within 90 days, the rules on collective consultation apply;
- and the law is changing to restrict fire and rehire further.
It should be a last resort, considered only after genuine consultation and legal advice.
After a business changes hands
When a business, or part of one, is sold and staff move to the new owner under TUPE, their terms move with them. A new owner will often want everyone on the same terms, but changes made because of the transfer are generally void, even where the employee agrees to them, unless one of the limited exceptions applies. If you are buying or selling a business, this is worth planning for early.
If a change has been imposed on you
You have options, and what you do next matters.
- Ask for the reasons, and raise it. Ask your employer to explain the change in writing. If you can’t resolve it informally, use the grievance procedure.
- Don’t let silence become agreement. If you carry on working under the new terms without objecting, you may eventually be treated as having accepted them. If you need to keep working while you dispute the change, say clearly in writing that you are doing so under protest.
- Pay cut without your agreement. You may be able to recover the shortfall as an unlawful deduction from wages.
- Constructive dismissal. A serious breach, such as a significant cut in pay, can entitle an employee to resign and claim constructive dismissal. Resigning is a big step and the timing matters, so take advice before you do it.
Employment tribunal claims have short time limits, and you will normally need to contact Acas for early conciliation before you can make a claim. Getting advice early keeps your options open.
If you’re an employer planning a change
- Check what the contract, the handbook and any collective agreements actually say.
- Be clear about the business reason, and whether there is a less disruptive way to achieve it.
- Consult properly, with the employees affected and, where there is one, the recognised union or employee representatives.
- Put the proposal, and anything agreed, in writing, and update the written statement of terms.
- Take advice before considering dismissal and re-engagement.
Our guide to contracts of employment, policies and handbooks covers the documents that set out what can and can’t be changed.
How MML Law can help
Our employment team represents both employees and employers, in Dundee and across Tayside. We can review a contract, advise on a change before it is made, help you respond to one that has been imposed, and represent you at the Employment Tribunal.
Talk to our employment team or call 01382 206000.
