Introduction to this document

Variation of terms of contract of employment letter (in exercise of a contractual power)

If you’re making a change to an employee’s contract of employment which is within the terms of that contract, generally you won’t need their consent. However, don’t expect to be able to rely on a blanket amendment power.

Contractual power

If well-drafted, the employee’s contract of employment may include provisions allowing you to make certain limited changes to their terms and conditions of employment without consent, for example, requiring them to relocate to a different workplace. In the case of a change permitted by a clearly drafted and express contractual provision, the change will be lawful. 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 term of mutual trust and confidence. 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 notice (giving them as much notice as reasonably practicable). The Variation of Terms of Contract of Employment Letter (in Exercise of a Contractual Power) is the relevant precedent to use here.

Blanket clauses

Some contracts of employment may purport to contain an express blanket power for you to be able to vary any of the terms of the contract when the needs of the business so dictate. As it stands, this type of clause will normally be unenforceable. Instead, a power to amend on a blanket basis will be interpreted as limited to changes of a minor and non-fundamental nature. Employment tribunals will always look carefully at how widely the relevant clause has been drafted. A variation clause needs to be clear and unambiguous in its power to change a specific contractual term.