What is a variation of an employment contract?

Varying an employment contract involves changing, removing or adding in terms and conditions of an employment contract after it had been signed.  It is possible for you to vary an employment contract, but you must have your employee’s consent and have a valid reason for doing so.

Formalities for variating a contract

Under the Employment Ordinance:

• An employer must inform the employee of such change clearly to the employee, whenever there is any change in the employment conditions
• an employer must provide his employee with a copy of the written amendment immediately after the amendment is reduced to writing or validate, where there is any written amendment to the employment conditions,

Reasonable variation of a contract

There are 5 valid reasons for varying a contract per the Employment Ordinance, including:

i) the conduct of the employee;

ii) the capability or qualifications of the employee for performing his work;

iii) redundancy or other genuine operational requirements of the business;

iv) statutory requirements; or

v) other substantial reasons.

With regards to i), the employment contract can be varied if the employee:

a. wilfully disobey any lawful and reasonable orders;

b. are guilty of misconduct;

c. are guilty of fraud or dishonesty; or

d. are habitually neglectful in their duties.

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