GB
One of the most common employment law questions we receive from founders, HR teams and growing businesses is how to change employment contracts safely.
On paper, updating an employment contract can seem fairly straightforward. In reality, changing an employee's terms and conditions is often much more complicated. Get it wrong, and what started as a simple contractual update can quickly turn into employee relations issues, grievances or even employment tribunal claims.
With the upcoming ban on "fire and rehire" practices under the Employment Rights Act expected to come into force in January 2027, getting employment contract variations right has never been more important.
Many employers assume they can issue updated contracts and ask employees to sign them. Unfortunately, it rarely works that way.
Significant changes to an employment contract will usually require the employee's agreement. This commonly includes changes to:
Obtaining employee consent isn't always straightforward, particularly where the proposed change is less favourable for the employee.
That's why seeking employment law advice early can save businesses a significant amount of time, cost and risk later on.
One area employers often overlook when making employment contract changes is consideration.
In simple terms, if you're asking an employee to agree to a contractual change that puts them at a disadvantage, you should usually be offering something in return. This helps make sure the agreed variation is legally enforceable.
In many cases, that might be:
What's appropriate will depend on the circumstances, but it's an important step that businesses often miss when updating employment contracts.
Things become even more complicated where an employer is considering dismissing and re-engaging employees who refuse to accept new contractual terms.
The Government's proposed reforms are expected to prohibit most "fire and rehire" practices where employers are seeking to change key employment terms. Once the new rules come into force, employers who rely on these approaches could face significantly greater legal risk, making careful planning and employment law support even more important.
Even where everyone agrees, don't leave things to chance.
Any employment contract variation should be clearly documented, confirmed in writing and signed by both parties. Proper documentation helps avoid disputes later about what was, or wasn't, agreed.
As employment lawyers working with startups, scale-ups and established businesses, we regularly see employers run into problems because they:
For startups and scaling companies, employment contracts often evolve as quickly as the business itself.
A contract that worked when there were five employees may no longer reflect how the business operates when there are fifty. Hybrid working arrangements change, bonus structures evolve, senior roles develop and new ways of working emerge.
Over time, it's easy for written contracts to fall behind operational reality, creating unnecessary legal risk for the business.
Every situation is different. The legal position will depend on the wording of the existing contract, the nature of the proposed change, how it's communicated and whether any consultation obligations arise.
If you're considering changing employment contracts, introducing new employee terms or preparing for the upcoming Employment Rights Act reforms, it's worth getting employment law advice before taking action.
Our employment lawyers work with startups, scale-ups and high-growth businesses to help them amend employment contracts, manage employee consultations and implement contractual changes in a way that's both legally robust and commercially practical.
Taking advice early can help reduce the risk of disputes, protect employee relationships and give your business confidence that any changes are implemented correctly.
