At Stephensons, we understand how unsettling it can be to be presented with a new contract of employment, particularly when it differs from your current agreement. If you are asking yourself, "can I refuse to sign a new contract of employment UK?", it is important to understand your legal rights, the obligations of your employer, and the potential consequences of your decision. This page aims to provide detailed guidance to help you make an informed choice about whether or not to accept a revised contract of employment.
Understanding what a contract of employment is
A contract of employment is a legally binding agreement between an employer and an employee that sets out the terms and conditions of employment. These include, but are not limited to, duties and responsibilities, pay, working hours, holiday entitlement, notice periods, and disciplinary procedures. Contracts can be written, verbal, or implied through custom and practice, though written contracts provide the clearest evidence of agreed terms.
Under UK law, you are entitled to receive a written statement of employment particulars within two months of starting work. This document may not be the full contract, but it sets out the main terms and serves as evidence of your employment relationship.
Why your employer may offer you a new contract
There are several reasons an employer might offer an employee a new contract of employment. These can include organisational restructuring, changes in job role or responsibilities, adjustments due to updated company policies, or legal compliance with new legislation. A new contract might reflect promotions, changes in working hours, or location changes. However, employers must proceed carefully when seeking to change terms without mutual agreement.
While an employer is allowed to propose changes to a contract, they cannot unilaterally impose those changes without either your consent or a legitimate contractual right to do so. Any attempt to force an employee to sign a new agreement without agreed negotiation may result in a breach of contract.
Your right to refuse a new contract
As an employee, you have the legal right to refuse to sign a new contract of employment. You are not under any obligation to agree to new terms, particularly if they are less favourable or significantly alter your existing working conditions. The question then becomes how your refusal might be handled by the employer, and whether your position is protected.
If you refuse to sign a new contract, your employer may choose to:
- Continue your employment under the existing terms
- Negotiate with you to reach a compromise
- Dismiss you and offer re-engagement under the new terms (known as ‘fire and rehire’)
In cases where dismissal is used as a tactic to enforce new contract terms, your employer must still follow fair dismissal procedures. If not, you may be entitled to bring a claim for unfair dismissal, provided you meet the eligibility criteria such as having a minimum of two years’ continuous service.
The risk of dismissal or ‘fire and rehire’
Some employers may resort to a controversial practice known as ‘fire and rehire’ whereby they dismiss an employee and offer them re-employment on revised terms. While this is not unlawful per se, it is a high-risk strategy with significant legal implications. Employers must consult appropriately and demonstrate a genuine business reason for the changes. If they fail to do this, affected employees may be able to pursue legal claims against them.
For an employee, refusal to sign a new contract should not automatically amount to misconduct or a resignation. However, if the employer follows a fair and lawful dismissal process and can show a valid reason connected to business needs, the dismissal might be considered fair in the eyes of an employment tribunal.
Assessing the changes in your proposed contract
Before deciding whether to refuse to sign a new contract, it’s crucial to understand the specific changes being proposed and assess how they will affect you. Not all contractual changes are negative, and some may be beneficial. Pay close attention to clauses regarding salary, working hours, job title, location of work, benefits, and termination rights.
Legal advice can be invaluable at this stage in identifying any clauses that are ambiguous, overly restrictive or unfavourable. At Stephensons, our employment law specialists frequently review revised contracts for clients and offer practical guidance on how to approach negotiations or raise concerns with the employer.
Constructive dismissal considerations
If a new contract is imposed on you without your agreement, and the changes constitute a fundamental breach of your current contract (e.g. a significant pay cut or a change in job location), it may amount to constructive dismissal. This occurs when an employee resigns in response to their employer’s breach of contract and may then be entitled to claim for unfair dismissal at an employment tribunal.
However, constructive dismissal claims can be complex and risky. An employee must demonstrate that they resigned promptly in response to the breach and that the changes were severe enough to destroy the employment relationship. Before taking any such step, it is strongly advised that you seek legal advice to weigh up the strengths of your potential claim.
Collective consultation requirements
Where an employer proposes changes which would affect 20 or more employees, or is considering terminating and re-engaging 20 or more staff, they are legally obligated to undertake a collective consultation, typically with employee representatives or trade unions. This process is intended to promote transparency, negotiation, and alternative solutions before any dismissals are executed.
An employer’s failure to properly consult could result in protective awards being made in favour of the affected employees, meaning they may be entitled to up to 90 days’ full pay as compensation. Whether you are individually affected or part of a wider workforce group, understanding your rights during such consultations is vital.
When refusing to sign may be the right choice
There is no one-size-fits-all answer to the question "can I refuse to sign a new contract of employment UK?" In some cases, standing your ground may be the most appropriate action, especially if the new terms are substantially worse or introduce clauses that could limit your future working opportunities, such as overly restrictive covenants or increased working hours without additional pay.
You should also consider whether the changes infringe upon existing statutory rights, such as the national minimum wage, working time regulations, or protection from unlawful discrimination. Any such breach would be unlawful and should be challenged, ideally with legal support.
Steps to take if you are presented with a new contract
If your employer presents you with a new contract of employment, your response should be measured and informed. The following steps are recommended:
- Request a reasonable time to review and consider the new terms
- Seek clarification on any unclear or concerning clauses
- Document any discussions regarding the proposed changes
- Consult an employment law solicitor for tailored legal advice
- Discuss your concerns with your employer or HR department in a professional manner
Acting in a measured way can prevent misunderstandings and demonstrate your willingness to engage constructively, even if you ultimately decide not to sign the contract.
How Stephensons can assist
At Stephensons, our employment lawyers have extensive experience advising individuals on all matters relating to contracts of employment. Whether you are currently employed, have been dismissed, or are being pressured to sign a new agreement, we can help you understand your rights and options. Our team provides practical, strategic advice tailored to your circumstances, and we can assist with negotiations, grievances, and potential tribunal claims if needed.
Each situation is unique, and making the right decision requires a clear understanding of the legal framework and the potential risks involved. Contact our employment law specialists to discuss your case and receive expert guidance at every step of the process.
Contact Us
If you are unsure about whether to sign a new contract of employment, or believe your rights have been infringed, speak to our employment law specialists at Stephensons today. Call us on 0161 696 6170 or fill in our enquiry form for more information and advice on your individual circumstances.
Comments