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Mythbusting Monday: Every change needs a new contract!

It's #MythbustingMonday so we're tackling the myth that every change in an employment relationship needs a new contract.


I'm changing an employee from part-time to full-time, do they need a new contract?

No! If all other factors of the employment are the same, then you can simply vary this term. You still need to get your employee to agree to this of course, and it is always recommended that this is done in writing through an addendum to the contract.


Does this also apply to pay changes, job titles etc?

Yes! If you are increasing pay or promoting an employee you can simply vary these parts of the agreement (again, in writing and with the employee's agreement). If there is a job change, it is important that they receive an updated job description so that you are both clear on expectations.


What about at the end of their probation period or 90 day trial?

No. An employee's terms remain the same unless you want to update them.


So when do they need a completely changed contract?

There are several cases including:

  • If the policies or terms of employment are changing greatly - it is a good idea to get them to complete a new employment agreement, rather than sign individual change documents. As we've mentioned before, the employee must agree to these changes. An employer cannot simply tell them that if they don't sign, they will have no job going forward.

  • If you buy a business and the employee remains employed - their original contract stands. You can provide them with a new contract as a condition of employment beforehand, providing the processes are followed correctly. In this case, it pays to work with the selling employer to ensure that this is the case.

  • If they are on a fixed term contract and you are extending this - it is important that you provide a new contract before the end of the fixed term. If you do not, they are considered permanent if their employment continues after the end of the fixed term.

In conclusion...

Variations to an employment agreement or an employee's terms should be documented and agreed to at all times, but a new contract is not necessarily required.



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