Some employers assume that an employment contract, once accepted and signed by both parties, is a done deal. Set in stone. Filed away and forgotten about. But in reality, reviewing employment contracts and revising essential clauses can protect your business from serious risks.
In today’s fast-paced legal and business landscape, there are numerous employment contract review triggers that it is foolish to ignore. Whether it’s legislative updates, internal restructuring, or changing work patterns, there are critical points in a contract’s lifecyce that every business owner should be aware of.
This blog outlines when to update employment contracts for most employers. It can’t be taken as formal legal advice, but it is intended to prompt a review of your employment contracts and offers general guidance on when and how to ensure your contracts stay compliant, protective, and up to date.
Why Employment Contracts Aren’t ‘Set and Forget’ Documents
An employment contract isn’t a one-and-done project. It’s a legal agreement that must reflect current laws, company policies, and the actual working relationship between you and your staff members. As your business grows and evolves, your contracts should too.
Outdated contracts can do more harm than good. They might breach recent changes in employment law or miss key protections for your business, such as IP protections or restrictive covenants. Out-of-date contracts can also undermine your position in disciplinary or grievance procedures and leave you exposed to claims or tribunal actions.
In short, it’s good practice to consider a contract compliance check every 12 months or after any significant business change. It may be that your current contracts are still appropriate, but without reviewing them, it’s easy to miss required amendments.
Key Legal Triggers to Review Your Contracts
In practice, several specific legal and practical triggers necessitate a review of any agreements you have in place. Issues often stem from law changes, business restructures, amendments to an individual’s role and responsibilities. Failing to act can leave your contracts outdated, non-compliant, and open to challenge.
Changes to Employment Law or Regulations
Employment law is constantly evolving. New statutory requirements, case law developments, and regulatory updates can all impact the content of your contracts. Some recent examples include minimum wage and living wage increases, updates to working time regulations, changes in statutory maternity/paternity/shared parental leave, adjustments to holiday pay calculations and the introduction of new or amended workers’ rights. Failing to reflect these updates in your contracts can put you on the wrong side of the law. That’s why a periodic legal review of your employment contract is essential.
If you need support navigating legal changes and staff contract updates, our employment law solicitors can help keep your documents fully compliant with the law and best practices.
Internal Business Restructures or Role Changes
Have you promoted someone or reorganised your teams’ structure in some way? It may be that you’ve merged departments or even merged with another firm. These kinds of internal developments act as natural triggers for contract updates.
Typical scenarios include adjustments to job titles, roles, responsibilities, or reporting lines. Mergers, acquisitions, or TUPE transfers also need legal review. Employment contracts are clearly affected by redundancies or role eliminations, too. Less direct changes, such as rebranding or shifts in company policy, may also trigger contractual concerns.
These structural changes can materially alter the employee’s position. Their contracts must be updated to reflect any new arrangements.
If you need help managing change, our organisational restructuring support is ideally placed to ensure your employment contracts evolve in line with your business.
Salary Adjustments or Changes to Working Hours
Pay reviews, performance bonuses, and changes to working patterns are all triggers for revisiting the employment agreement. Specific examples include transitioning workers from full-time to part-time or vice versa, implementing flexible or hybrid working policies, introducing commission or bonus structures, and modifying core working hours or shift patterns.
It’s important not rely solely on verbal agreements or informal arrangements made by email, for example. Any updates ought to be documented through a formal contract variation, ensuring clarity and legal protection for both parties.
Change in Company Ownership or Stakeholder Structure
It’s critical to review your employment contracts should your business undergoe a change in ownership or operating structure. This ensures continuity for and compliance with legal best practices. Business sales, acquisitions, or mergers are also key triggers for contract review and amendments. Changes to director ownership or equity structures, new shareholders or investors and succession planning transitions are also prompts to act. Reviewing contracts if a business restructures ensures that all terms remain valid, enforceable, and aligned with the new organisational structure.
Remote Working or Location Flexibility Introduced
With the rise of hybrid and remote work, many companies have informally shifted how their teams operate. But has your documentation caught up? If employees are now working remotely full-time or part-time, is this reflected in their contracts? Are issues such as homeworking expenses and amended hours covered? Increasingly, employees are taking advantage of improved technology to regularly relocate, working as so-called digital nomads.
For instance, failing to define clear expectations for remote work and working hours for a travelling employee could result in a dispute over availability or overtime. Likewise, contracts that omit updated holiday entitlements or family leave provisions may violate employee rights and trigger costly penalties. Without regular staff contract updates, it is easy to fall behind the latest employment trends.
It is easy to unwittingly create confusion around your expectations as an employer without a firm grasp of current employment law reflected in up-to-date contract documents.
Outdated or Non-Compliant Clauses
Over time, the law can change, and contractual clauses that were once deemed acceptable may become, at best, unenforceable or, at worst, against the law.
High-risk areas to watch out for include ani-competition or golden handcuff clauses that are too broad or too long in duration, vague confidentiality clauses that don’t address specific IP issues, excessive notice periods, and outdated disciplinary and grievance processes. Regular contract compliance checks can help identify and rectify these risks before they cause
Want peace of mind? Our experts can give you the confidence that comes from being up to date and aligned with current HR & Employment Law.
How Often Should You Review Employment Contracts?
Even if there are no apparent changes in your business or the law, best practice recommends reviewing all employment contracts at least annually.
This routine review allows you to catch any drift in working practices, like unpaid overtime,
and ensure alignment with evolving policies such as remote working. Annual checks enable you to maintain legal compliance as case law and statutes evolve, and benchmark your contracts against current market standards. An annual review is also an excellent opportunity to ensure your contracts align with your organisation’s more general business policies and terms and conditions. These should, of course, be regularly reviewed too.
Need Help With Employment Contract Review Triggers?
If responding to employment contract review triggers sounds time-consuming or legally daunting, you’re not alone. Many business owners worry about doing it right, or simply don’t have the in-house expertise to handle it properly. At Jamieson Law, we offer tailored employment contract review services for businesses of all sizes in the UK and Ireland. Whether you need a quick compliance check, help updating clauses, or a complete contract overhaul, our expert solicitors can help you stay on the right side of employment law, reduce the risk of staff disputes or tribunal claims, and build watertight, protective documentation for your team.
Your employment contracts aren’t just paperwork. They’re the foundation of your relationship with your team and a critical part of protecting your business from costly disputes.
If you’re unsure whether your contracts need updating, or just want a second pair of expert eyes, get in touch with Jamieson Law today.
