Amending an employment contract
Last updated more than 5 years ago
It is possible for an employer to modify the conditions governing a working relationship. However, under no circumstances may the content of the employment contract be amended unilaterally by the employer. The employer must comply with a number of formalities, with the aim of protecting and respecting employees' rights.
Amendments can be made to both permanent employment contracts and fixed-term employment contracts.
There are two scenarios for the amendment of an employment contract:
- if the amendment is neutral for or favourable to the employee: it can be applied straight away, without the employee's consent, after an addendum to the contract has been drawn up;
- if the amendment is unfavourable to the employee and relates to a clause in the employment contract that is deemed to be essential: the employer must follow a well-defined procedure.
Who is concerned
The following parties are involved when amending an employment contract:
- the employer wishing to amend one of the clauses of the employment contract;
- the employee who is free to accept or refuse the amendments to their employment contracts proposed by employers.
How to proceed
Amendments that are neutral for the employee or in the employee's favour
An amendment to the employment contract is only ancillary if:
- it concerns an element to which the parties clearly did not attach any great importance when signing the employment contract;
- the employer and the employee had initially provided for the possibility of a subsequent amendment to the employment contract (for example, mobility clause).
Whether an addendum is favourable to the employee or not, any change to one of the elements of the employment contract must be implemented by means of a written addendum to the employment contract.
The addendum must be drawn up in 2 copies, with one copy for the employer and one for the employee.
If the amendment is neutral for the employee or in their favour, it may be applied immediately, without the employee's consent.
If the employee continues to work after the amendments have taken effect, the worker is then considered to have accepted them.
Should the employee object to amendments that do not affect an essential clause of the contract, or to amendments in their favour, such opposition may be interpreted as a refusal to work. Under certain circumstances, this may be considered serious misconduct, justifying dismissal by the employer with immediate effect.
Amendment of an essential clause in the employment contract which is not in the employee's favour
As a general rule, the following changes are considered to be an amendment of an essential clause:
- clauses concerning the employee's compensation, i.e. any reduction in base pay and/or any reduction in or withdrawal of fringe benefits. However, a change in the method used to calculate the compensation is not necessarily an essential amendment, as long as the overall salary level is maintained and the new calculation method is in the employee's favour;
- clauses concerning the employee's job classification, in particular if the worker is downgraded to a lower job-classification level, even if the compensation remains unchanged. Thus, the demotion of an employee from a management role to a subordinate role is considered to be an essential amendment to the terms of the employment contract that is disadvantageous to the employee, even if their compensation remains unchanged. However, a simple transfer from one function to another, or from one department to another, with no change in job classification or compensation, is not considered to be an essential amendment;
- non-competition clauses, i.e. adding a non-competition clause which restricts the employee's liberty in the future;
- clauses concerning working hours, since any reduction or increase in working hours is likely to impact the level of compensation.
A change in the working hours is not generally considered to be an amendment of an essential clause of the employment contract, especially if the latter contains a clause stipulating that the working hours are flexible and may vary depending on the needs of the business. Switching from a continuous work schedule to a stop-start work schedule was considered to be a material amendment.
Should the employee's job classification change, the addendum to the employment contract may not stipulate a new trial period;
Amendment with notice
An amendment to the employment contract for reasons other than serious misconduct must be notified to the employee, observing the the same procedures and deadlines as for dismissal with notice.
The length of the notice period depends on the employee's length of service.
The letter notifying the employee of the amendment must specify the date on which the amendment takes effect.
On receipt of the letter announcing the change to their working conditions, the employee has one month to submit a request to their employer asking the latter to explain the reasons for the amendment.
Amendment with immediate effect
An amendment with immediate effect must be notified to the employee, observing the same procedures and deadlines as for dismissal for serious misconduct.
The employer can, therefore,:
- immediately notify the employee of the amendment to the employment contract with immediate effect;
- or first announce a suspension and then notify the employee of the amendment of the employment contract. Such notification can given at the earliest on the day following the announcement of the suspension, and at the latest 8 days after the suspension.
The letter notifying the employee of the amendment must explain in detail the serious reason(s) that prompted the employer to make such a change. If the employer fails to provide the employee with these reasons, or if the employer gives imprecise reasons, the change is applicable, but is considered to be unfair and may result in the payment of damages.
Acceptance or refusal by the employee
Employees are free to accept or refuse essential amendments to their employment contracts proposed by their employer. However, if they continue to work after the amendments have taken effect, they are then considered to have accepted them.
If an employee refuses to accept essential amendments to their employment contracts, they will have to resign. The resignation will then be considered as a dismissal which could give rise to legal action on the part of the employee to dispute the real and serious nature of the amendments.