Changing Employment Contracts in the UK: What Employers Need To Know About Legal Process and Employee Consent

You decide it’s time to tweak how your business runs. Maybe you’re moving to hybrid working, thinking about closing one site and shifting people elsewhere, changing shift patterns to match demand, or trying to rein in a bonus scheme that’s grown legs.

From the business side, it can feel like a straightforward policy call: you work out what needs to change, announce it, and hope everyone rolls with it.

In legal terms, though, you’ve just put your hands on people’s contracts. That brings in the Employment Rights Act 1996 (ERA 1996), the Employment Act 2002, collective consultation rules in TULRCA 1992, and the newer Statutory Code of Practice on Dismissal and Re-engagement. If you get the process wrong, you’re not just dealing with a bit of pushback – you could be looking at breach of contract, constructive or unfair dismissal claims, and potentially very expensive protective awards.

This article walks through what’s really going on in law when you change employment contracts in the UK, what “employee consent” actually involves, and what the risks are if you skip the careful bits in the middle.

What the “employment contract” really is

An employment contract is the bundle of agreed terms between you and the employee. Some are written down – job title, salary, hours, place of work, notice. Some are implied - like the duty of mutual trust and confidence – or come from collective agreements you’ve adopted.

The Employment Rights Act 1996 doesn’t require a single formal contract document, but it does require you to give every employee and worker a written statement of employment particulars (the core terms). Since April 2020 that’s a day-one right, and the statement has to cover things like pay, hours, holiday, place of work and notice periods.

If those particulars change – for example, you alter hours, pay or location – section 4 ERA 1996 says you must give a written statement of the change. Acas and GOV.UK are clear: that has to be done within one month of the change taking effect.

There’s also a quiet penalty mechanism. Under section 38 of the Employment Act 2002, if you fail to provide a compliant written statement (or written updates) and the employee wins another claim – such as unfair dismissal – a tribunal can add an extra 2–4 weeks’ pay to the award.

So every time you change a core term, you’re not just negotiating; you’re potentially triggering statutory duties to confirm that change in writing, with a risk of extra compensation if you don’t.

Consent: why you can’t just announce contract changes

UK law still runs on a basic contract rule: you cannot unilaterally change contractual terms just because the business has evolved. Both sides must agree to variations, unless there’s a very clear contractual mechanism that lets you do something specific.

Consent can be:

• Express - the employee signs a variation letter or emails to say “yes, I agree”; or
  
• Implied - they’re told about the change and then carry on working under it for a significant period without objecting.

Implied consent is where employers often over-reach. If someone says in writing “I do not agree, but I’m working under protest”, and you treat silence after that as agreement, you’re on thin ice. Pushing ahead regardless can amount to a breach of contract and, if the change is serious enough (for example a big pay cut or fundamental shift in role), a fundamental breach of the implied duty of trust and confidence. That’s where constructive unfair dismissal claims come from: the employee resigns and says your conduct forced their hand.

Flexibility and variation clauses

Many contracts contain a “flexibility” or “variation” clause – for example:

• “We may make reasonable changes to your duties or place of work”; or
  
• “Your hours may vary to meet business needs.”
  

Those clauses are not a blank cheque. Tribunals and courts read them narrowly. To carry weight they generally need to be:

• clear and specific about what kind of change is allowed (for example, locations within a reasonable commuting distance, or varying start and finish times within a stated band); and
  
• used reasonably, in a way that doesn’t destroy trust and confidence.
  

So a flexibility clause might support modest tweaks to duties or a move to another site a few miles away. It’s unlikely to justify a 25% salary cut or a relocation to the other end of the country without proper consultation.

What a fair change process looks like

There isn’t a single “Contract Changes Act” telling you exactly what to do. Instead, you’re combining:

• general contract law on variation and consent;
  
• the ERA 1996 requirements around written particulars; and
  
• Acas guidance and case law about what a fair process looks like.
  

Acas’s guidance on changing contracts boils down to four steps: plan, consult, seek agreement, then confirm in writing.

Imagine you run a café chain and want to open earlier, which means moving some staff from 8am to 6am on certain days.

Legally sensible practice looks something like this:

1. Plan the change: work out exactly what you’re changing (start times on particular days), why (increased morning trade), who is affected, and whether any union or collective agreement is in play.
   
2. Explain and consult: sit down with the affected staff, explain the business case in plain language, hear their concerns, and explore adjustments (for example, rotating the early starts or paying a small premium). If someone has health or caring issues, you may also have duties under the Equality Act 2010 to consider reasonable adjustments.
   
3. Seek consent: once you’ve refined the proposal, ask employees to confirm they agree. Ideally they sign a short variation letter.
   
4. Confirm in writing: record the agreed change in writing within a month – either in a variation letter or an updated written statement under s4 ERA 1996.
   

None of that is complicated. But if there’s a dispute later, being able to show you consulted, listened, adjusted and got written agreement makes a huge difference.

Bear in mind that most employees need two years’ continuous service to bring an ordinary unfair dismissal claim – but some claims (discrimination, whistleblowing, certain detriments) have no minimum service. So it’s still worth getting the process right even for newer staff.

When people say “no”: dismissal and re-engagement

Sometimes, even with a decent process, not everyone agrees.

Let’s say you’re tightening up an overly generous bonus scheme. You’ve explained the financial reasons, offered a transitional payment, and most people sign. A handful of key staff refuse.

At that point, the law recognises a blunt option: dismissal and re-engagement (“fire and rehire”). Legally, you give notice to end the existing contract, and at the same time offer re-employment on the new terms. If the employee accepts, their employment continues – but there has still been a dismissal for unfair dismissal and, if enough people are affected, for collective consultation purposes.

Because of how controversial this is, a Statutory Code of Practice on Dismissal and Re-engagement came into force on 18 July 2024 under TULRCA 1992.

The Code does not ban fire and rehire, but it makes three things very clear:

• dismissal and re-engagement should be a last resort, after genuine attempts to reach agreement;
  
• employers should start open, meaningful consultation early, sharing enough information for staff or reps to understand the business case and suggest alternatives; and
  
• employment tribunals can increase or decrease compensation by up to 25% if an employer (or employee) unreasonably fails to follow the Code.
  

On top of that, if you’re proposing to dismiss (with or without re-engagement) 20 or more employees at one establishment within 90 days, section 188 TULRCA triggers collective consultation duties – essentially the same framework used for collective redundancies. You must inform and consult appropriate representatives (a recognised union or elected employee reps), within minimum timescales, and notify the government.

If you don’t collectively consult when you should, an employment tribunal can make a protective award of up to 90 days’ full pay per affected employee – on top of any unfair dismissal compensation. The government has confirmed this maximum will be doubled to 180 days’ pay from April 2026 under the Employment Rights Bill, which will make breaches even more expensive.

So “we’ll just fire and rehire them” is not a casual Plan B. It’s a high-risk route that needs very careful planning, documentation and consultation.

Key takeaways

If you’re an employer in the UK thinking about changing contracts – hours, working locations, job roles, bonuses, hybrid working – the law doesn’t stop you. Businesses change terms all the time. What it does do is insist that you:

• recognise that many of these points are contractual, not just policy;
  
• keep your written particulars up to date in line with ERA 1996 and confirm changes in writing within a month;
  
• consult and seek real consent, instead of simply imposing changes and hoping silence equals agreement;
  
• treat dismissal and re-engagement as a genuine last resort, following the 2024 Statutory Code of Practice and, where the numbers trigger it, collective consultation rules;
  
• and understand that skipping these steps can turn a tidy operational tweak into breach of contract, constructive or unfair dismissal claims, and significant protective awards.
  

A bit of planning goes a long way. If you map out what you want to change, link it to the specific clauses and statutes it touches, and design a consultation process aimed at genuine agreement (with dismissal and re-engagement parked firmly at the “in case of emergency” end of the spectrum), most changes can be made smoothly – and you’ll be in a much stronger position if anything is ever challenged.

Chatting with a legal expert can help ensure you’re staying legally compliant when changing employment contracts. If you would like a consultation, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.