Adverse (to the employee) changes in existing terms of employment are usually made in one of three ways:-

1. by agreement with the employee(s), possibly with a cash "sweetener";
   
2. by unilateral variation of contract terms (or of works rules applied by the contracts); or
   
3. by giving required notice to terminate existing contracts and offering new contracts on new terms

Choices open to an employee are:-

• go along with the employer's proposals;
  
• reject them and quit, perhaps claiming constructive dismissal , or
  
• reject them but continue to work on a without prejudice basis (ie "under protest") on the new terms, reserving all rights, negotiating if possible and ultimately bringing court or Tribunal proceedings if agreement cannot be reached.

The basic rule is that a unilateral change to terms and conditions of employment made by an employer without agreement of the employee is generally a breach of contract. In serious cases this can give the employee the right to resign and claim constructive dismissal . One result is that the ordinary civil courts will have jurisdiction as well as (or instead of) an employment tribunal (see notes at Employment tribunals/jurisdiction of ). This can be important because the courts have greater powers than tribunals to award compensation in breach of contract cases and because legal aid may be available in the civil courts but (save in exceptional cases in Scotland) is not available in employment tribunal cases. Employees in particular would be well advised to take expert legal advice in any such case.

To avoid the risk of a successful unfair dismissal claim employers must be able to demonstrate a substantively fair reason for making the change and must be careful to carry out appropriate procedures (see Disciplinary and Grievance Procedures - 2009 changes ) prior to terminating an existing contract as of course termination amounts to dismissal.

It should be noted that even a clause agreed by an employee giving the employer the right to make unilateral changes will not give the employer a total carte blanche. An employee may still be able to claim unfair constructive dismissal if the employer makes significant changes (see notes at Right to work and eg Bass Leisure Ltd v Thomas, EAT 30th June 1993 reported at [1994] IRLR 104, and Lee & ors v GEC Plessey Telecommunications [1993] IRLR 383 and Star Newspapers v Jordan EAT 1993 on 22nd November 1993, unreported). Employers in particular would be well advised to take expert legal advice in any such case.

For application of the continuity of employment rules when there is a change of terms of employment, see Continuous employment/change of terms with same employer . Special rules apply if a change of terms occurs on change of ownership of a business (see Transfer of business or undertaking/change in terms of employment after ).

Changes in terms of employment must be notified to employees within one month, or sometimes sooner if overseas work is involved (see Statement of particulars of employment & ERA 1996 s.4). It is essential that employees are fully aware of, and accept, any detrimental changes to their terms of employment if the changes are to be legally binding. Acceptance can sometimes be inferred by the employee's conduct (eg continuing to work without objecting to the change -see Bainbridge v Circuit Foil (UK) Ltd CA 1997 ICR 541, CA for a general review by the Court of Appeal).

For the position where there are changes in terms of employment after a business has been sold or transferred or when there is a change of contractor to carry out a part of a business which has been outsourced see Transfer of business or undertaking/change in terms of employment after .