Introduction to this document

Letter seeking agreement to vary employment contract terms

The best way to achieve a change to one or more terms of an employee’s contract of employment is by mutual agreement. Let the employee know in writing that you are proposing to make a change and seek their written consent to it.

Binding contract

The contract of employment is binding on both parties. This means that it’s generally unlawful for you to unilaterally change an existing employee’s contract without their agreement - unless the change is permitted by the contract itself. If you impose contractual changes without their express agreement, you will be in breach of contract. If the breach is sufficiently serious, they may claim constructive unfair dismissal if they’re forced to resign due to your actions and they have sufficient continuity of employment. An employee can generally claim constructive dismissal if they have been employed for two years or more.

Express agreement

If you wish to change an employee’s contract of employment, you should first inform them both verbally and in writing that you’re proposing (not making) a change. You should set out in detail the nature of the proposed change and why it’s necessary for the needs of your business. Our Letter Seeking Agreement to Vary Employment Contract Terms will help you here. The employee should be invited to consider the change and then revert to you with their views.

Not willing to agree

If an employee is not willing to accept a proposed change, you will have to engage in a period of negotiation to try and obtain their consent to the change. You could offer an incentive to help here. This could take the form of a pay increase, a one-off bonus or extra holiday entitlement. Alternatively, you might have to amend your proposal to one that is acceptable to the employee.