Employment contracts – is annual review necessary?

Regular reviews of contracts will ensure they remain relevant, but it is not necessary to re-issue them every year.

Contracts of employment for permanent employees remain active throughout the entire period of employment. Changes to an initial contract can only be made after consultation, which is a discrete process in its own right, and failure to engage in “genuine” consultation with employees may leave an employer vulnerable in a dispute.

Contracts should be reviewed regularly to ensure they reflect the current arrangements. If any changes have been negotiated with an employee, or there have been significant changes to the industrial legislation, or the business model/service type has changes, then a letter of variation to the contract of employment detailing the changes (for example a change in hours of work) should be attached to the original contract.