Variation of terms letter

What you need to know

The plain-English guidance that comes with this document.

• You need their agreement — you can't just impose it. An employment contract can't normally be changed by one side alone. Talk the change through, reach agreement, and confirm it in writing (that's what this letter does, with the employee signing to accept). Imposing a change without agreement risks a breach of contract claim, an unlawful deduction claim if it cuts pay, or a resignation-and-constructive-dismissal claim.
• Steer well clear of "fire and rehire". Dismissing someone for refusing a change and re-engaging them on new terms is legally dangerous and getting more so. Right now it's a genuine last resort governed by a statutory Code of Practice — ignore the Code and a tribunal can add 25% to any award. And from January 2027 the Employment Rights Act 2025 goes further: dismissing someone for refusing a "restricted variation" (things like a pay cut, changed hours, less leave or different shifts) becomes automatically unfair, save for a narrow genuine-financial-survival exception. The safe route, by far, is agreement.
• Put the detail in, not just "your hours are changing". Spell out the old position and the new one, and the date it starts. Vague variation letters cause arguments later about what was actually agreed. Because a change to the main terms must be reflected in the written statement, this letter effectively updates it — keep it with their statement of main terms.
• Mind the knock-on effects. A change to hours or pay can ripple into holiday entitlement, overtime, pension contributions and sick pay. Check those before you confirm, so the new terms actually hang together.
• A trial period can break a deadlock. If someone's unsure, agreeing a temporary trial of the new arrangement — clearly stated as a trial — is often a fairer, calmer way forward than forcing a yes/no. Just be clear what happens at the end of it.
• Watch for discrimination and consistency. Be careful that a change doesn't fall harder on one group — for example, cutting or fixing hours in a way that disadvantages people with caring responsibilities could be indirect discrimination. Apply changes consistently and be ready to explain the business reason.
• Applies UK-wide. The need for agreement, and the fire-and-rehire rules, apply across Great Britain; Northern Ireland sets its own employment law, so if you're in NI check whether the same reforms apply there and when.