Do we need to update our contracts of employment if people are now working permanently from home?

Yes, you do, but let’s take a look at a few principles first.

A contract of employment is an agreement between the employee and the employer that outlines the rights and duties of both sides.

At some stage either you as the employer or your employee might want to change the contract of employment. However, neither party can change the employment contract without each others’ agreement. Changes should normally be made after negotiation and agreement and should always be confirmed in writing.

Changes to employment contracts could be made by:

  • agreement between employer and employee after a period of negotiation or discussion
  • collective agreement – this is a negotiation between the employer and a trade union or staff association
  • implication – that is through a long standing custom and practice which has now become a contractual change. For example, if you have always allowed all employees a day off each year for New Year’s Eve, this would be considered a contractual change if it has happened for 3 or more years.

Reasons for changing an employment contract

Employers sometimes need to make changes because of economic circumstances. The business may need to be reorganised, moved to a new location or there may need to be changes because of new laws or regulations. Simple changes can be recorded in what’s known as a “side letter” to confirm what the change is, or in more complex changes; such as changing someone’s place of work from the office to their home, as this impacts a number of clauses within the contract of employment, we would suggest that the contract of employment is re-issued in full.

  • rates of pay
  • working time – for example, longer/shorter hours or different days
  • an employee’s duties and responsibilities
  • the location of where you work from

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