MAKE YOUR FREE Change to Employment Terms Letter
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What is a Change to Employment Terms Letter?
A Change to Employment Terms Letter is a legal document that sets out an employer’s proposed changes to an employee’s terms of employment. Using a Change to Employment Terms Letter ensures that you have the employee's consent and agreement to make the proposed employment change.
Changes to Employment Terms Letters should be used when employers have a clear contractual right to change employment terms or when an Employment contract doesn’t expressly disallow the employer to make such changes.
When should I use a Change to Employment Terms Letter?
Use this Change to Employment Terms Letter:
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to notify an employee that you are exercising a contractual right to change their employment terms
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to seek an employee’s agreement to a proposed change in employment terms
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to advise employees that, if the change of terms is not agreed upon, a consultation meeting will take place
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only for employees based in England, Wales or Scotland
Sample Change to Employment Terms Letter
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Dear ,
Proposed changes to your contract of employment
This letter sets out the proposal by ('we' or 'us') to change your contract of employment dated as follows.
A new clause will be inserted and the existing clauses renumbered accordingly. The new clause will read "". The other terms of your contract of employment are not affected and remain in full force and effect.
We wish to make this change because .
Yours sincerely,
About Changes to Employment Terms Letters
Learn more about making your Change to Employment Terms Letter
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How to make a Change to Employment Terms Letter
Making a Change to Employment Terms Letter online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all of the details prepared in advance, making your document is a quick and easy process.
To make your Change to Employment Terms Letter you will need the following information:
Party details
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What are the employer’s details (eg legal structure and name)?
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If the employer is a company, LLP or partnership, who will sign the Change to Employment Terms Letter on the employer’s behalf?
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Will this Change to Employment Terms Letter be printed on headed paper including the employer’s name and address?
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If not, what is the employer’s address?
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What is the job title of the employee’s contact person for this matter?
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What are the employee’s details (ie their name and address)?
Letter
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On what date will this Letter be sent to the employee?
Employment
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What is the date of the employment contract?
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Do you wish to:
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Insert a new clause into the employment contract? What number will your new clause be? What is the new wording that you want to add to the contract?
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Delete a clause and replace it? What is the number of the clause that you wish to delete and replace? What is the replacement clause wording you want to add to the contract?
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Is there a clause in the employment contract that allows you to make this proposed change to the terms? If so:
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What is the number of the clause that allows you to make a modification?
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From what date will the change take effect?
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Why do you wish to change the terms of the contract?
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Is the employee being offered compensation in return for the change in their contract?
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If so, what is being offered in return for the change in their contract?
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Consultation
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Will there be a meeting with the employee to discuss the change to their contract?
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If so, have arrangements for this meeting been made already? What are the details of the meeting?
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If the employer does not have a contractual right to make changes
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By when must the employee return this letter giving their consent to the changes?
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Common terms in a Change to Employment Terms Letter
A Change to Employment Terms Letter sets out (proposed) changes to the terms and conditions of somebody’s employment. To achieve this, this Letter covers:
Sender and recipient details
The start of the Change to Employment Terms Letter sets out the details of the employer and the employee to whom the Letter is being sent.
Proposed changes to your contract of employment
The body of the Change to Employment Terms Letter sets out the (proposed) change to the employee’s employment terms. It also explains why the employer wishes to make this change and, where relevant, sets out the compensation being offered to the employee and relevant consultation details.
Signatures
The Change to Employment Terms Letter must always be signed by the employer. The Letter always includes a signature block for the employer. However, if the employer doesn’t have a contractual right to change the employee’s employment terms, the employee must agree to the proposed change by countersigning the Letter. Therefore, an employee signature block is included in the Change to Employment Terms Letter when relevant.
If you want your Change to Employment Terms Letter to include further or more detailed provisions, you can edit your document. However, if you do this, you may want a lawyer to review or change the Change to Employment Terms Letter for you to ensure it complies with all relevant laws and meets your specific needs. Ask a lawyer for assistance.
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Legal tips for making a Change to Employment Terms Letter
Check whether you have an express right to change an employee’s employment terms
Before making your Change to Employment Terms Letter, you should check the employee’s contract to see whether you have an express contractual right to make changes to the employee’s terms of employment. If the contract grants you such a right, you do not generally need to gain the employee’s consent to the changes. However, if the contract doesn’t grant you such a right, you will need the employee’s agreement to change their terms of employment.
For more information, read Changing employment terms. For more information on what happens if you do not gain the employee’s consent, see the FAQ ‘What if changes have been made without agreement?’.
Consider consulting with the employee
Holding a meeting to discuss the changes is strongly recommended, to help make sure that things go smoothly. If you do not have a contractual right to make the proposed change, but the changes are necessary, a consultation will be an essential part of a fair process. Even when you have the right to impose a change, a consultation with employees may be necessary to ensure that you are not exercising your rights in an unreasonable way.
For more information, see the FAQ ‘What is a consultation meeting?’.
Understand when to seek advice from a lawyer
Ask a lawyer if:
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this document doesn’t meet your needs
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you are dismissing and re-engaging 20 or more employees to achieve a contractual change
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you are changing multiple employee’s terms of employment at the same time
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you have employees based outside England, Wales and Scotland
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Changes to Employment Terms Letter FAQs
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What is included in a Change to Employment Terms Letter?
This Change to Employment Terms Letter template covers:
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the change to employment terms that is being made or proposed
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the reason for the change
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optional consultation arrangements
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Why do I need a Change to Employment Terms Letter?
You need a Change to Employment Terms Letter when you want to change an employee's contract of employment. Making changes to an employee’s employment required their formal and proper consent. If you don’t get the employee’s consent they may bring a legal claim against you.
As a result, you should use a Change to Employment Terms Letter to notify the employee of the (proposed) change and to receive their written agreement in order to make the change valid. The latter enables you to properly formalise the employment term changes.
For more information, read Changing employment terms.
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What are some common changes to employment contract terms and conditions?
Common changes to the terms and conditions of an employment contract include changes to:
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pay (including pay cuts, reduction or removal of bonuses or overtime entitlements, reduction to sick pay, or removing any obligatory pay rises)
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hours, for example, increasing, cutting, or changing hours (ie from day to night shift)
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the employee’s physical place of work
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job duties and role descriptions
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fringe benefits
Changes may also be made as following the investigation of a disciplinary matter (eg demotion).
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How can changes to terms of employment be made?
Changes to employment contracts can be made by:
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agreement between the employer and employee
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collective agreement (ie the result of negotiations between an employer and a trade union or staff association), or
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implication, by way of a change in long-standing custom and practice (eg if an employer allows a day off each year for New Year's Eve)
Changes without agreement can only be made if an employee’s employment contract says so (eg if the contract specifies that their place of work may change). For these types of changes to be enforced, they must be allowed by a clearly worded clause, often referred to as a flexibility clause. However, a change that is impossible for employees to comply with (eg a requirement to relocate overseas with one week's notice) cannot be enforced.
Even if an employer has the right to impose a change, it helps things to go smoothly if the reason why the change is being made is explained. Providing a brief factual description that employees understand and which makes business sense within this Letter is usually enough.
For more information, read Changing employment terms.
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What is a consultation meeting?
After a Change to Employment Terms Letter has been sent, you should organise a consultation meeting.
The consultation meeting is an opportunity for the employer and employee to discuss the changes and will help make sure that the process goes smoothly. It is also an opportunity to identify and propose alternative ideas as well as to communicate any future plans (which could, for example, include possible retirement plans for older workers).
If there is no contractual right to make the proposed change but it is necessary to do so, then consultation will be an essential part of a fair process and necessary to ensure that the employer is not unreasonably exercising its rights.
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Do employers have to offer compensation for a change to employment terms?
Even when you have the right to impose a change, it sometimes makes sense to offer something in return to help employees feel fairly treated. In some cases, the right to make the change in the first place requires that something is being given in return (eg that a particular benefit can be withdrawn provided that an equivalent benefit is offered).
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What if changes have been made without the employee's agreement?
Imposing a change without either a contractual right or the employee's consent is likely to be a breach of contract and could be considered constructive dismissal.
If these circumstances, employees can:
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refuse to work under the new conditions
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say that they're working any new terms under protest and are treating the change as a breach of contract
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resign and claim constructive dismissal
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take a case to an Employment Tribunal
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What if an employee refuses to agree to a change?
If an employee does not agree with a proposed change, you should attempt to resolve the disagreement informally by talking to them or by using mediation.
If the employee still refuses to agree, as a last resort the employer can end their contract (using the correct dismissal procedure) and then re-employ them or someone else using a new Employment contract.
For more information, read Changing employment terms.
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What if an employee wants to change their employment contract?
Employee-initiated changes can only be made by way of agreement. Common employee-requested changes can be:
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better pay (if they do not have an automatic right to a pay rise)
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improved working conditions
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greater holiday entitlements
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different, or flexible, working hours
An employee only has the right to insist on changes covered by legal rights (eg opting out of Sunday working or the 48-hour working week).
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What happens if the employer’s business is sold?
If the business owner changes (because the business has been sold), and there are no changes to the terms of an employment contract, employers only need to write to the affected employees within a month of the change. New employment contracts are not required.
If there are any changes to the actual terms of employment, then a new employment contract (with the new business/owner) must be issued within 2 months.
For more information, read Transfer of undertakings and Ask a lawyer if you have any questions or concerns.
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