What kinds of contract changes count as a ‘restricted variation’?

Under the Act, a restricted variation is a change to certain key contractual terms that are considered particularly important to workers’ terms and conditions. 

The Act identifies the following as restricted variations, subject to regulations on specified shift-pattern changes and possible exclusions for certain expenses or benefits: 

• A reduction in, or removal of, contractual pay or other contractual payments. 
• Changes to the way pay is calculated where it depends on work done (for example, commission or productivity-related payments). 
• Changes to pension terms or pension scheme benefits. 
• Changes to contracted working hours. 
• A reduction in contractual leave or time off. 
• The inclusion of a contractual term allowing the employer to make these changes without the employee's agreement. 
• Certain changes to shift patterns, as specified in regulations. 

If an employer seeks to impose one of these changes and dismisses an employee for refusing to accept it, the dismissal is likely to be automatically unfair unless the employer can meet the limited financial difficulties exception.  

Not every contractual change is a restricted variation. For example, changes to job duties or place of work are not currently included within the definition, although other legal protections and consultation requirements may still apply.  

What this means for union reps 

• Changes to pay, hours, shifts, pensions and leave should receive particularly close scrutiny, as these are the areas where the strongest protections against fire and rehire apply. 
• Employers may still seek agreement to contractual changes, but they will face much greater restrictions on using dismissal to force workers to accept detrimental changes to these key terms. 
• Reps should engage early when contractual changes are proposed, seek advice from their union and ensure meaningful consultation takes place before any changes are agreed. 
• Even where a proposed change is not a restricted variation, members may still have legal and collective bargaining protections, so it is important not to assume that an employer can impose changes unchallenged.