Changes to terms and conditions of employment letter template

UK employment law and best practice

This template is designed to support the process, but the document should be used alongside the relevant HR procedure and applied to the circumstances of the individual case.

Changing an employee's contractual terms can involve significant legal and employee relations considerations. Employers should establish whether the relevant term is contractual, whether the contract permits the proposed change and whether the employee's agreement is required before implementing it.

Contractual changes

An employer cannot generally assume that it can unilaterally change an employee's contractual terms simply because the business would benefit from the change. The employer should first review the contract and consider whether there is an applicable contractual flexibility or variation clause.

Consultation

Where a proposed change requires employee agreement, employers should consult with affected employees openly and explain the reasons for the proposal. Consultation should provide a genuine opportunity for employees to ask questions, raise concerns and suggest alternatives.

Written confirmation

Where a contractual change is agreed, the employer should confirm the new arrangement in writing. GOV.UK states that employees and workers must be told about changes to their written statement within one month of the change. https://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particulars

Refusal to agree

If an employee refuses to agree to a proposed contractual change, the employer should not simply treat the new term as automatically effective. Depending on the circumstances, options may include further consultation, maintaining the existing arrangement, considering alternatives or, in some cases, considering termination and re-engagement. The legal and employee relations risks of the particular approach should be assessed before action is taken.

Discrimination

Employers should consider whether a proposed contractual change could disproportionately affect an employee because of a protected characteristic or interact with a disability requiring reasonable adjustments. A business reason for changing terms does not remove the employer's obligations under equality legislation.

Collective consultation

Where an employer proposes changes affecting a group of employees, collective consultation requirements or obligations arising from recognised trade unions or employee representatives may need to be considered. The appropriate process will depend on the nature and scale of the proposed changes.

Changes to pay and working time

Particular care should be taken where changes affect salary, working hours, overtime, shift patterns or other financial terms. Employers should ensure that the revised arrangement continues to comply with applicable minimum wage, working time and other statutory requirements.

Record keeping

The employer should retain a clear record of the proposed change, consultation, employee representations, agreement where obtained and the final contractual terms. This can be important if there is subsequently a dispute about what was agreed.