Changing an employment contract

When a trade union can agree changes

Trade unions can agree contract changes for employees when: 

  • it’s written in the employee’s contract that the trade union can agree changes (‘incorporated’ into the contract)
  • it’s not written in the employee’s contract but the employer normally agrees contract changes with the trade union (an ‘implied’ term of the contract) 

Check for existing trade union agreements

Sometimes there’s an agreement between the employer and trade union (‘collective agreement’) that says the trade union can agree changes for employees. This could be for changes to specific contract terms like pay or holiday.

A collective agreement can only be enforced if it’s included (‘incorporated’) in the employment contract. An employee does not have to be a member for a trade union to agree changes for them.

If a change affects 20 or more employees

If an employer decides to dismiss and rehire 20 or more employees, there is a legal obligation to consult with any recognised trade unions or employee representatives. This is called ‘collective consultation’.

If an employer does not hold the collective consultation, they could be fined up to 90 days’ pay for each affected employee.
    
The collective consultation must run for 30 to 45 days (depending on the number of employees being dismissed).

Even if an employer is not planning to dismiss and rehire employees, running collective consultation can:

  • save time, if the employer later decides to dismiss and rehire 20 or more employees
  • help agree a change with employees
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