Employee Contracts and Rights

First published on Thursday, June 4, 2020

Last updated on Monday, July 8, 2024

Your staff members have statutory employment rights. They’re set out in law to ensure equal and fair treatment.

There can also be variations depending on what’s contained in each employment contract. So, your employees’ entitlements are a combination of statutory and contractual rights.

In this article, we explain what you need to keep in mind to ensure legality and fairness when dealing with your staff members.

And, remember, if you need any employment law advice on this right away you can get in touch with us.

Statutory employment rights

There are a range of rights you’ll need to consider when hiring—they apply to your entire workforce. Some of your responsibilities include:

Paying at least the national minimum wage.
Providing a written statement of main terms and conditions within two months of your employee starting work. Most employees are legally entitled to this.
Ensuring there’s no discrimination in the workplace.
Providing notice of dismissal where your employee has worked with you for at least one month.

In the employment contract, you can then explain your company policies along with the start date for your employee, wage, and other essential details.

Contractual employee rights

The terms and conditions in your company handbook will give employees rights and responsibilities specific to your business.

The contract may also give your employees rights above and beyond their statutory entitlement.

You can only add to statutory rights when providing a contract. You’re not allowed to offer fewer rights than your employees are legally entitled to.

But your employees can consent to a change to some of the limitations on their rights.

So, change of employment contract can happen should your business need to make any amends.

However, it’s important to remember you’ll need to get the consent of your employee in most instances—we detail these requirements in full further below.

Part-time employee contract rights

A part-time employee works fewer hours than full-time staff. But the exact amount each would work isn’t set in stone.

Here are a few types of part-time work:

Casual work.
Job share.
Evening work.
Weekend work.

Your part-time employees should have the same contractual rights as your full-time employees in relation to:

Annual leave.
Career development opportunities.
Redundancy.
Career breaks.

You’ll need to calculate entitlements, like annual leave, on a pro rata basis. It’s not compulsory to pay part-time employees for overtime until they’ve worked more hours than a full-time employee.

It’s generally unlawful to treat part-time employees less favourably in comparison to full-time employees on account of their part-time status.

You can treat part-time employees differently from full-time employees in some situations. You have to demonstrate “objective justification”, which is a good reason for the different treatment.

An example is where part-time employees want health insurance but this would cost much more than the benefits they’re entitled to.

You can explore a middle ground in this situation by asking your part-time employee to contribute money to cover the additional cost.

Remember that, as an employer, you’ll need to provide part of the funding for this. That’s an equivalent to the amount of time they work compared to a full-time employee.

Changing terms and conditions of employment

Okay, with the above all in mind what do you need to consider if you want to go about changing contract terms?

It’s a complex process and you do need to remember the needs of your employees, as well as those of your business.

Under current employment law, change of contract can go ahead if you need to make any alterations. But there can be legal and HR consequences if you don’t handle the changes appropriately.

For example, if you’re planning on changing contracted hours then you do have the right to do so. Other common amends can include:

Salary changes (either raises or reductions).
Relocation requirements for the business.
Job duty changes.
Fringe benefits.
Maternity or paternity rights.
Updates due to changes in British laws.

But there are laws you’ll need to follow to make a change of contract at work.

First, remember that varying a contract of employment can’t happen unless the employee consents to it—you must provide a good business reason for making any adjustments and explain these to the staff member clearly.

Providing your reasons in writing is good business practice. But there are still several ways in which you can vary your contracts:

Collective agreement between you and your employee.
Variations already established in the contract.
Through independent decision of the new terms (a unilateral imposition).
Through dismissal or re-engagement of the changes.

Regarding the final point, if employees fail to agree to the amends then you can dismiss and attempt to re-engage them under new terms and conditions. Consider that option carefully, however, as it can create legal problems.

There are some updates you can make without getting your employee’s agreement. For example, as a business you can improve your bonuses and perks as you see fit.

Additionally, changing contracts of employment is particularly suitable if you’re promoting a member of your staff.

The contract change process to follow

Before changing other details in your employment contracts, you should do the following:

Have a discussion with the employee or their representative.
Provide details about why the change is necessary.
Take into account ideas about how you can do things differently.

You can adapt a contract by:

Reaching an agreement with your staff member or trade union.
Using a flexibility clause in the employment contract.

But once you have agreed changes, you can send the staff member a change of contract letter that explains the discussions held and what is being adjusted in their contract. You’ll need to do this within one month of the changes taking effect.

Further below, you can find a template for this.

Dismissing and rehiring employees

Remember that changing a contract without agreement is against the law. Contract change notice is a requirement.

Your employees have the right to a consultation. In this, you’ll explain:

Why you’re having to dismiss them.
Alternative options available to them.

You should consult for 45 days if you’re dismissing an employee for a reason not relating to them. After which you can dismiss a staff member. You’ll need to re-engage them on a new contract after this.

During this consultation, you can aim to agree on a solution that doesn’t require dismissal. But tell the employee from the outset that you may have to consider dismissal if you don’t reach an agreement on the change of contract.

If this is the case, then you’ll have to provide statutory notice or contractual notice of dismissal.

Should you be looking to change a contract in this way, it does present legal risks.

There’s also no guarantee an employee will accept what you offer them and come back to work for you.

Writing a change of contract letter

In this section you can find an example for the type of written statement you should send to your employee.

Use the below template as a guide only. You should make sure you adapt it to suit your business’ needs, as well as accommodating for your employee in each circumstance.

*Sample letter*

Business letterhead

Address

Date

Dear [employee name],

This letter explains to you a proposal of changes to your employment contract by [business name]. Your previous contract is dated to [date of employee’s first day].

There will be a new clause [name of change] we will include. This will read as follows: [include details of the update].

The other terms of your contract are not affected by this update. The reason for the change is due to [explain your reasoning].

If you wish to contest this amend, please let us know in writing.

Yours sincerely, [name of manager]

*End of sample letter*

Flexibility clauses

You can include flexibility clauses in the contract to notify your employees that you have the right to vary some provisions in their contract.

For example, you could require your employees to work in different locations. Apply flexibility clauses fairly.

After you agree to the changes

When you agree on changes with your employees, you should do the following:

Update their written statement of employment.
Write to them within one month of the amendment (detailing what has changed).
Tell your employees where to find information about the changes (if the updates aren’t recorded in their contract).

How to offer extra employee support

If you want to make updating contracts or other documents as easy as possible, you can use our employee support software.

It allows you to manage your employees’ records in one place and offer your staff members services such as confidential advice lines and face-to-face counselling.

Your employees will also have access to review their contracts, your staff handbook, and any other documents where you record changes.

Need more help?

We can help you understand employment law and change of contract details. We can resolve any issues you have. Get in touch with us today: 0800 783 2806.