A variation of an employment contract is a change to its terms, for example to pay, hours, duties, location or benefits. Because the contract is an agreement, an employer generally cannot simply impose changes; doing it the wrong way risks claims and disputes. Here is a plain-English guide for England and Wales.
The golden rule: changes usually need consent
An employment contract can normally only be varied by agreement. So to change a term, the employer needs the employee's consent, which may be:
- express (the employee agrees, ideally in writing); or
- implied (the employee works under the new terms without objecting, though relying on implied consent is risky, especially where the change has no immediate effect).
Unilateral changes (imposed without agreement) are generally a breach of contract.
Flexibility clauses, useful but limited
Some contracts contain flexibility (variation) clauses allowing the employer to make certain changes (e.g. to duties or location). These can help, but courts interpret them narrowly and expect them to be exercised reasonably, a broad "we can change anything" clause may not be enforceable for significant changes.
Notifying changes: the written statement
When terms change, the employer must give the employee a written statement of the change, generally within one month of it taking effect (Employment Rights Act 1996, s 4). This is separate from the question of whether the change was agreed.
The risks of getting it wrong
If an employer imposes a change without consent:
- the employee may work "under protest" and claim breach of contract or unlawful deduction from wages (e.g. for a pay cut);
- a serious imposed change can amount to a fundamental breach, allowing the employee to resign and potentially claim constructive dismissal, though an ordinary unfair dismissal claim will usually require two years' continuous service unless an exception (such as an automatically unfair reason) applies; or
- the employee may simply refuse and sue to enforce the original terms.
"Fire and rehire", a last resort with strict rules
Where employees won't agree to a needed change, some employers consider dismissing and re-engaging them on new terms ("fire and rehire"). This is high-risk: it is a dismissal (so unfair-dismissal rules apply; and where the employer proposes to dismiss 20 or more employees at one establishment within 90 days or less, statutory collective consultation rules may apply because such dismissals can count as redundancies), and there is a statutory Code of Practice on dismissal and re-engagement that employers must follow; where relevant proceedings are before a tribunal, the Code can result in certain awards being adjusted up or down by up to 25% for unreasonable non-compliance. Treat it as a genuine last resort.
How to vary a contract properly
- Consult employees and explain the business reason for the change.
- Seek express agreement, ideally in writing.
- Confirm the change in writing within one month (s 4 statement).
- Consider incentives or a phased approach to gain agreement.
- Follow the Acas guidance (and the fire-and-rehire Code if that route is unavoidable).
- Take advice before imposing change, the downside risk is significant.
Key takeaways
- A variation is a change to contract terms, which generally requires the employee's consent (express or implied).
- Unilateral changes are usually a breach, risking claims for breach of contract, unlawful deductions or constructive dismissal.
- Confirm any change in a written statement within one month (ERA 1996, s 4); rely on flexibility clauses only cautiously.
- "Fire and rehire" is a high-risk last resort governed by a statutory Code, consult, seek agreement, and take advice.
Sources
- Employment Rights Act 1996, s 4 (written statement of changes to particulars)
- Common law on variation of contract (need for consent; constructive dismissal for fundamental breach); interpretation of flexibility clauses
- Statutory Code of Practice on Dismissal and Re-engagement ("fire and rehire"); Acas guidance; collective consultation rules
--- This article is general information about the law of England & Wales as at 2026, not legal advice. For advice on your circumstances, consult a qualified solicitor.