What is a Change of Employment Terms Letter?

A Change of Employment Terms Letter is required to change the terms of employment for an employee.


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What is a Change of Employment Terms Letter?

As the name suggests, you use a Change of Employment Terms Letter when you want to amend the terms of employment of an employee. This letter can be of use to alter such details as an employee’s salary, working hours, commission, and annual leave entitlements. Or, to add benefits, relocate an employee, or accommodate employees with additional or different career responsibilities. However, if you wish to promote an employee, you should use a Promotion Letter. Importantly, this letter overrides the corresponding terms in the original contract. There is no need to sign a new employment contract unless legal counsel advises it would be prudent to do so.

When to use?

Essentially, you can use this letter when making any changes—whether major or minor— to the existing terms of employment. For example, an employee may ask their employer to reduce their working hours to accommodate a change of situation, this letter would come in handy then.

These changes can be agreed upon in different ways, such as:
 
  • When a change is proposed, discussed, and mutually agreed upon by the involved parties.
  • When the employers have a ‘Collective Agreement’ signed with a Trade Union and the union on the employee’s behalf will agree to the changes in the terms.
  • When the change is implied and occurs through custom and practice, over time. 

 

How to legally make changes to terms of employment 

An employment contract is a legal contract between an employer and an employee. Legally, the employer cannot make any changes to the terms of employment without the consent of the employee. However, there are certain circumstances in which an employer can revise existing terms.  One way to revise the existing Terms of Employment is by putting a “Flexibility Clause” in the Employment Contract during the recruitment process. A Flexibility Clause provides an employer the legal right to make changes to the existing terms of employment. Another is by mutual agreement. If the employer and employee both agree to the changes made then this letter is the ideal document to make it official.

Conclusion

A Change of Employment Terms Letter is good to have on hand whenever an employer wishes to make changes to an employee’s existing terms of employment. When handling your own human resources for your business, this is a good letter to have in your company’s tool box. 

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