Changing The Terms of Employment: What You Need to Know

Posted:  Nov 6, 2023

The question of whether an entity can change the terms of a contract is very complicated, as the answer depends on various factors, such as the flexibility clause in the existing contract, the local labor laws, and the mutual agreement between the parties involved.

In the labor world, for instance, if an employee or an employer changes the terms of an employment contract without following due process, such a move could result in legal issues.

And so, in this comprehensive blog, we delve deep into this crucial subject and offer you detailed insights on the legal position on varying contract terms and how you can negotiate changes to your employment contract.


Can Employers Change Employment Contract Terms?

The answer to this question is not exactly straightforward. On the one hand, an employer cannot lawfully change the contract terms. On the other hand, it is also possible for an employer to change the terms and provisions of an employment contract, provided that the original contract has a flexibility clause, also known as a variation clause.

A flexibility or variation clause, if inserted into an employment contract, will allow an entity, usually an employer, to change the contract under certain conditions while still adhering to applicable labor laws and regulations.

However, if an employment contract does not have a flexibility or variation clause or if the clause doesn’t support the change being proposed, any changes to the contract terms could lead to a series of legal issues.

Thus, employers and employees should seek legal advice before making any changes to an employment contract.


How to Change Employment Contract Terms

As an employee or employer, if a situation demands that you make a change to an employment contract, there are various methods you can use. In this blog section, we will look at some of them.


1.     Negotiation and Agreement

In changing an employment contract, one of the methods you can use is to communicate openly with the other party and negotiate any proposed changes to the contract to ensure fairness and legal compliance. This method is often considered the most straightforward and mutually acceptable, as both parties will have the privilege to discuss it openly and try to reach a mutual agreement. This approach also promotes a more collaborative and positive working relationship.


2.     Fire and Rehire

Another brilliant and somewhat controversial way to change the terms of a contract is to terminate an employee’s existing contract and then offer a new contract with different terms and conditions. This is usually done when the employer wants to make significant changes to employment terms, such as reducing pay or altering working hours.

The only downside of this approach is that, if not done carefully, it could bring about legal and ethical scrutiny. In extreme cases, it could even lead to disputes or legal action.

3.     Collective Bargaining

Although this is not as common as the previous ones we discussed, another way to change the contract terms is to negotiate with the employee union body. However, as we posited earlier, this method is not common because of the prolonged negotiation that it involves. In short, it tends to waste time and resources. Also, not every employee belongs to a labor union.


What to do if an Employee Accepts or Doesn’t Accept the Change in Contract Terms

Assuming the employee agrees to the changed terms, the next step would be to incorporate the newly agreed-upon terms into the employment contract formally. You also have to ensure that a revised contract is prepared, and the individual should receive a copy of this updated contract within a reasonable timeframe to maintain transparency and clarity regarding the modified terms of employment.

Conversely, if an employee doesn’t accept the change in contract terms but the contract itself includes a flexibility or variation clause, then you can proceed to change the terms as it pleases you. It is, however, advisable to provide the employee with written notice of the changes, along with clear explanations of how and why they are being applied. After the necessary alterations have been made and you have also informed the affected party, the decision to either continue under the updated terms, quit, or renegotiate the terms becomes the responsibility of the affected employees.


Can an Employee Request Changes to Their Contract?

Yes, an employee can request changes to their contract at any point in time. It should, however, be noted that such requests or proposals do not get granted automatically. Generally, employers are not legally obligated to agree to such a request. That is, the employer will decide whether they want to renegotiate the terms of an employment contract or not.


Need Assistance? Contact us Today!

Employment contracts, generally, are legally binding, and as such, they can’t be changed easily unless the other party agrees to them or they contain a flexibility or variation clause.

That said, if you are an employee or an employer in British Columbia and you have a question or need advice on any aspect of changing employment contract terms, don’t hesitate to contact us today.

At Steven and Company Law Corporation, we have a team of business employment law specialists with the knowledge and experience to handle various employment documentation and contract issues.



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