I need to change a contract. They will not agree

Alan Creevy, Founder · 27th October 2026

The usual way this goes wrong is quick, and it feels reasonable at the time. You write to the person with the new hours, or the new rate, you give them a fortnight to come back, and when they do not come back you start running the new terms anyway. By then you have made a decision you did not know you were making.

A contract is not something an employer can change alone. Acas puts it plainly: any changes must be agreed by both the worker and employer. So the question is what to do when the answer is no. The order matters, because the route employers usually fall back on last is about to close.

First work out which term you are actually changing

The Employment Rights Act 2025 inserts a new section 104I into the Employment Rights Act 1996, built around something it calls a restricted variation. The list is specific: cutting or removing any sum payable in connection with the employment, changing the measure used to work out pay where pay depends on one, changing anything about pensions, changing the number of hours someone is required to work, changing the timing or length of certain shifts, cutting someone’s entitlement to time off, and putting a clause in the contract that lets you do any of those things without agreement. Regulations can add to it.

On 22nd October the government said how it intends to fill in the detail. The shift changes caught will be those requiring someone to work nights, days, weekends or weekdays they were not previously required to work. Moving a daytime shift by a few hours will not be caught. Cutting contractual travel or accommodation expenses, mileage included, will be caught; changes to share schemes will not.

Plenty of what a small employer actually needs to change is nowhere on that list. Duties. Job title. Who someone reports to. A move between sites the contract already covers. Off the list, dismissing someone for refusing, or to take them back on the new terms, will not be automatically unfair, but under the new section 104J a tribunal deciding whether it was fair will have to weigh your reason for the change, how you consulted and what you offered in return. On the list, read the last two sections properly before you write to anybody.

Check whether you already have the right to make the change

Some contracts carry a flexibility clause, letting the employer vary certain things without going back for agreement. Read yours before you negotiate something you do not need to negotiate.

Then read it sceptically. GOV.UK is clear that employers can only use flexibility clauses to make reasonable changes, and its own example is an employer insisting on a move to another country on a week’s notice. A clause that says “the company may vary terms from time to time” is not a licence to halve someone’s hours. Relying on one for a big change is closer to imposing the change than to agreeing it, with the same consequences.

One thing to note now: once the new rules start, adding a clause of that kind for any of the restricted variations is itself a restricted variation. Dismissing someone for refusing to sign up to the clause is caught in the same way as dismissing them for refusing the change.

Consult like you mean it, and keep the paper

Consultation is not a letter announcing the outcome. Acas asks employers to work out what issue they are trying to solve and whether a contract change is definitely needed to solve it, to explore other options, and to make clear why the change is needed. Where the terms are agreed with a recognised trade union, you must consult it.

Take one change at a time. Consider a phased or temporary version, or offering something back, extra leave being the obvious candidate in a business with no spare cash.

Write down what you proposed, when, what was said, and what you offered instead. If this ends in a tribunal, the difference between a fair process and an unfair one is usually a file, not an intention. And once a change is agreed, you have a month to give the employee a written statement of it.

If they still say no, you have three routes and they are not equally safe

Impose it. Acas is blunt that this puts you in breach of contract. If the change cuts pay, you also risk a claim for an unlawful deduction under section 13 of the Employment Rights Act 1996. The employee can keep working while objecting in writing, which is called working under protest, and still claim. If the change is fundamental, they can resign and claim constructive dismissal. Someone who works on quietly under the new terms without saying they disagree may be treated as having accepted them, which is why employers sometimes get away with it. It is not a plan.

Find the version they will accept. Not a soft option. A smaller change you can implement next month beats a bigger one you are still arguing about at Easter.

Dismiss on notice and offer the new contract. Lawful today. You need a fair reason, which here is usually some other substantial reason under section 98(1)(b), a fair process, the correct notice, and an appeal. You must follow the statutory code of practice on fire and rehire, and if you unreasonably fail to, a tribunal can increase compensation by up to 25%. Acas says the code advises contacting its helpline before you raise the possibility with staff. If you are proposing to dismiss 20 or more people at one site within 90 days, collective consultation applies even though this is not a redundancy: 30 days before the first dismissal for 20 to 99 people, 45 days for 100 or more. And if the real situation is that you need fewer people rather than different terms, this is a redundancy and a different process altogether.

The third route is the one that is closing

Once section 104I is in force, a dismissal will be automatically unfair where the principal reason is that the employee would not agree a restricted variation, or that you dismissed in order to get the same work done under varied terms, whether by taking the same person back or by bringing in somebody else. There is one way out and it is narrow: you have to show the change was needed to deal with financial difficulties affecting, or likely in the immediate future to affect, your ability to carry on as a going concern, and that you could not reasonably have avoided it. A tribunal will test that the way a court tests a public body’s decision.

The part that catches small employers is the qualifying period, because there will not be one. Section 28(5) of the Act adds this to the list of dismissals anyone can claim from their first day. Length of service will not help you, and nor will the fact that it was eleven staff rather than a hundred.

When is less certain than it looks. The government’s implementation timeline, updated on 22nd October, moved these protections from January to March 2027, and the regulations they need have not been made, so treat the month as intended rather than fixed. Two related dates are settled. The unfair dismissal qualifying period drops to six months on 1st January 2027, so between the two changes the third route still exists but anyone with six months’ service can challenge how you used it. And the time limit for most tribunal claims rose from three months to six on 1st October 2026, so something you do in November can still land on your desk in May.

What to do this week

Write down the change you need and check it against the restricted variation list. Off the list, there is no deadline, so do it properly. On the list, the fallback route is expected to go in March, which is a matter of months, and you should not spend them waiting on one letter.

Put the proposal to the person in a meeting rather than an email, with the business reason and at least one alternative you would accept. Keep notes of every round.

If the answer is still no, take advice before you dismiss anyone, and do not start running the new terms in the meantime because it feels like the quiet option. It is the one route that gives them a claim without you ever deciding to take a risk.

Tarn.hr provides HR guidance based on UK employment law and Acas codes of practice. It does not constitute legal advice and should not be relied upon as such. Employment law is complex and turns on the facts of each case. For any situation involving significant legal risk, potential tribunal claims, or matters of particular sensitivity, you should seek advice from a qualified employment solicitor. Tarn.hr is not responsible for any decisions made on the basis of its guidance.