Letter to Amend Employment Agreement

This template letter provides an acknowledgement to be signed by the employee to indicate their agreement to the variation to the employment agreement, as contained within the letter. It allows for changes to salary, and other changes. If you would like a simple salary variation letter, see the Salary Increase Letter or the Salary Reduction Letter.

Generally speaking, an employment agreement cannot be varied unilaterally. Likewise, it is illegal to compel an employee to agree to vary the agreement, such as by threatening adverse action. While there is room for flexibility under every agreement, both parties should be on board with any changes that affect its terms, otherwise a range of legal issues, beginning with breach of contract, may arise.

We recommend discussing any change with the employee before taking further action, to maintain good faith between both parties. Once there is "in principle" agreement, you can send this letter and await the employee's response. There is no time limit in theory for the employee to sign and return the letter, but the amendment should be completed before either party changes their conduct in accordance with the new terms.

If there is a question of whether the employee is casual or permanent, it should also be considered in this letter and relevant factors pointed out. For this, we recommend seeking legal advice.

What are the benefits of a Letter to Amend Employment?

A Letter to Amend Employment can be useful to modify or update to the terms of an existing employment contract, without having to create an entirely new contract.

A letter to amend employment is a valuable tool for both employers and employees, as it helps to ensure that both parties are aware of any changes to the employment relationship by:

• Outlining the changes being made to the employee's terms of employment, the letter provides clarity and helps to avoid misunderstandings about the employee's role and responsibilities.
• Establishing as a written record of the changes being made, which can be important in the event of a dispute.