Employment contract variation flow chart 1

Use this flow chart to assist you when you need to vary an employee’s terms and conditions of employment. 

Things to consider

You may need to vary the terms for various reasons, including the need to react to economic circumstances, to respond to changes in the marketplace and/or technological advances, or to reorganise the business to make it more efficient or profitable. If the change is one which is favourable to the employee, they are unlikely to resist it. If, however, the change is unfavourable, there may be scope for dispute. In such circumstances, the change will be a breach of contract unless you have a contractual right to vary the contract, obtain the employee's consent, or terminate the existing contract in accordance with its terms and offers a new one containing the variation. The last two options are discussed in our guidance to Employment Contract Variation Flow Chart 2 and our Letter Terminating Employment and Offering Re-employment on New Terms.

Note that even where you have a contractual right to vary which gives you flexibility to change a term, this is subject to the proviso that you have proper business grounds for exercise of the express power and that you exercise your power fairly, equitably and in a manner that is not in breach of the implied duty of mutual trust and confidence. Where the proposed change is more than trivial, this will generally include meeting with the employee to discuss the change, considering any objections that they put forward, consulting further with them to try and reach agreement and implementing the change on reasonable notice.

Written statement of employment particulars

If contractual terms have effectively been varied and the variation relates to any of the terms and conditions required by law to be covered in the written statement of employment particulars that the employer is obliged to provide (including those now required to be given under the regime in force from 6 April 2020), the employer must, within one month of the change, issue a new or amended written statement (or a written statement of change) giving details of the change. A failure to do so will not affect the variation but will entitle the employee to a remedy for failure to provide the statutory written statement.