Shawnee Love   •  
August 10, 2012

As businesses grow and evolve, there will come a time when you need to change the terms and conditions of employment for an employee.

Terms & conditions refers to the fundamental aspects of the job and might include things like:

• Job duties
• Reporting relationships
• Hours of work
• Wages
• Rights and responsibilities around ending the employment relationship
• Obligations for confidentiality, etc.

Approaches for changing the terms & conditions range from arbitrarily making the change (e.g., when there is no other option for the business) to negotiating changes with the employees affected and giving plenty of transition time to boot.

No matter where on the spectrum your method of making the change falls, there is one step you can not overlook:

Consideration

In contract law, consideration refers to the something of value that you give in return for adjusting the terms and conditions of a contract.  Most often, I see consideration as the lump sum amount you offer your employee to accept and work under the new terms and conditions but it can also be tied to a promotion, a raise, or a gift, as long as the item wasn’t promised before the terms and conditions revisions were introduced.  E.g., you can tie a change to terms and conditions to a promotion if you offer the promotion at the same time as you introduce the new terms and conditions and advise the employee that the new role will be guided by the new terms and conditions.  However, you can’t offer a promotion and then two months later decide to change the terms and conditions and expect an employee to accept without consideration.

And before you ask, allowing an employee to keep his job is never valid consideration. However, we can help you determine what is good consideration and help manage the change as well.