When an employee remains with a business over time, the employer may need to make changes to the employment agreement. If you need to make these changes or if you are an employee whose agreement will be changed, you should understand the practical and legal effects of doing so.

Which Kinds of Changes Might Be Made to an Employment Agreement?

Usually employers need to make changes to employment agreements because of different circumstances for the employee or the business. For example, it might be time for an agreement update if:

• The employee receives a substantial raise or promotion
• The employee receives new employment perks (time off, health care, etc.)
• The company changes name or ownership
• The employee's duties change significantly
• Language in the agreement becomes outdated due to changes in the law or industry

How Do You Make Changes to an Employment Agreement?

An employment agreement is a binding contract, so making changes is not as simple as crossing out and writing in new language. Employers should avoid making unilateral changes to employee agreements. In particular, alterations to an employee's detriment (such as lowering salary) are frowned upon. You should talk to your employees and agree on all changes to their contracts. If they do not consent to changes, you may have the ability to dismiss them depending on the wording of the contracts. Then you can rehire them under new contracts that include the new terms.

An employment agreement may explain when it can be terminated or how to make changes to it, though not all agreements include this language. If your agreement does give such an explanation, then you should follow it in making changes. If not, then you may need to make an addendum to the agreement or draw up a brand new one for the future.

From an employee perspective, you may have room to negotiate if you learn that your employer plans to change your employment agreement. Perhaps you would like a larger raise or want to update your list of duties in the agreement. If so, then meet with your manager before you sign the new agreement.

Further, employees should always carefully read their contracts of employment before signing them. In doing so, you could catch significant errors or omissions or learn of special conditions of your employment, rather than being surprised by them in the future.

To find out more about employment agreements in The Bahamas, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

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