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Change/Amend Contracts

Variation of Employment Contracts

Varying a contract of employment must be handled carefully to  maintain legal compliance and good employee relations. 

What is the procedure for varying terms of employment?

Identify and clarify the need for change (e.g. business restructure, role change, pay adjustment, location move, working hours) and check the current employment contract for any additional flexibility, such as variation or mobility clauses.

Consult with the employee, explaining the business reasons and potential impact (collective consultation required for 20 or more employees); allow employees to raise concerns, propose alternatives or seek clarification; retain consultation records (or minutes of meeting) and any correspondence explaining the proposed changes. 

Any agreement must be by mutual consent and recorded in writing. If the employee(s) disagree, options start at further negotiation to termination or re-engagement - legal advice should be sought for such latter outcomes.

Once an agreement has been reached, download and edit/complete the Variation Of Employment Contract Letter with details of the agreed amendment(s) to the employment terms. This is a generic template which can be applied over a broad range of changes to employment contracts. Alternatively, or in addition to this letter, provide a revised contract of employment. Download up-to-date templates from the Contracts of Employment selection.

The generic variation letter is supplemented by a range of other templates that cover common specific changes to employment terms:

  • The Alternative Work Offer Letter should be applied where an employer seeks to find an employee a position more suitable to the employee's current circumstances.
  • The 48 hour Working Time Directive Waiver should be applied when a opt-out clause has not been included within the contact of contract of employment and must be voluntary. Guidance Notes are also provided to help employers comply the Working Time Regulations 1988.
  • The Possible Relocation of Business Premises Letter provides for explanation of the reasons for a proposed move and the employer's wish to consult with employees. If the relocation is significant the employer must consider at an early stage their reliance on the mobility clause or considering/commencing a redundancy procedure. If in doubt, professional legal advice should be sought.
  • A selection of pay related letters covering national minimum and living wage, a Salary Sacrifice Letter providing for salary reduction in exchange for a non-cash benefit, and Salary Reduction as Alternative to Redundancy Letter  which is most commonly used where businesses are facing a downturn in business.
  • A selection of Sunday Working letters.

Please view the full choice of these Variation of Employment Contract templates below:

Variation of Employment Contracts is part of Employment. Just £38.50 + VAT provides unlimited downloads from Employment for 1 year.

Frequently Asked Questions

I need to change an employee's hours, pay or location. What process must I follow before issuing a variation letter? +
Consult the employee before issuing any variation letter. Identify the business reason, check whether the existing contract already permits the change through a flexibility or mobility clause, then hold meaningful consultation: explain the reasons, allow concerns or alternatives and keep records. Document any agreed change in writing, using the Variation of Employment Contract Letter on this page once agreement is reached. If agreement cannot be reached, seek legal advice before considering dismissal and re-engagement, a last resort under the statutory Code of Practice on Dismissal and Re-engagement (in force July 2024).
My employee has agreed to a contract change. Do I need to issue a new contract or will a letter do? +
A full new contract is not required, but you must confirm the agreed change in writing. The Variation of Employment Contract Letter on this page is the standard way to do this: it records the specific amendment without replacing the whole contract. Under ERA 1996 s.4, you must give written notice of any change to the statutory written particulars within one month of the change taking effect. If you prefer, you can also issue a revised contract of employment; Simply-Docs provides up-to-date Contract of Employment templates for that purpose.
My employee regularly works more than 48 hours a week. Do I need a separate opt-out agreement? +
Yes, for most workers aged 18 or over, unless the contract already includes a working time opt-out clause. However, some workers cannot opt out at all, for example road-transport or mobile workers covered by drivers'-hours rules and security guards on vehicles carrying high-value goods, and workers under 18 are capped at 40 hours a week and cannot opt out, so for them an opt-out agreement is not an available route. Under the Working Time Regulations 1998 the default maximum averages 48 hours per week, but an employee may agree in writing to opt out. The opt-out must be voluntary and can be signed at any time, including after the contract is issued, and the employee may cancel it on giving the notice period set out in the agreement (or seven days if none is specified). Use the Simply-Docs 48 Hour Working Time Directive Waiver and supporting Guidance Notes on the Working Time Regulations 1998.
I am thinking about relocating our business premises. What do I need to tell employees and when? +
Inform and consult employees as early as possible, explaining the reasons for the proposed move and its likely impact, and check whether any mobility clause covers the new location. Flexibility clauses must be applied reasonably and courts interpret them narrowly, so consider whether invoking it would be reasonable. For a significant relocation, a redundancy process may apply if employees are unwilling or unable to move. Use the Simply-Docs Letter Advising Employee of a Possible Relocation of Business Premises for initial notification and consultation, and seek professional legal advice if in doubt about whether the clause covers the move.
Which Simply-Docs template should I use when I want to offer an employee a different role rather than changing their existing one? +
When you are proposing a new position rather than amending existing terms, use the Alternative Work Offer Letter. It differs from the Variation of Employment Contract Letter, which records an agreed amendment to existing terms. If the offer involves a salary reduction, the Letter Seeking Agreement to Salary Reduction as Alternative to Redundancy may also be relevant, particularly where the business is facing financial pressures.
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