October 2, 2002 by Israel Foulon LLP
Question: When we first started the company we did not require our employees to sign an employment contract upon hiring. We have since implemented a policy of having new hires sign written employment contracts and are wondering if we can also ask our existing employees to do the same.
Answer: Generally, an employer cannot insist existing employees sign a written employment contract without providing some new consideration or benefit to the employee. Quite innocently, the employer may be altering rights employees have gained through tenure. Therefore, insisting on a new written contract could amount to constructive dismissal. If employees do not receive any consideration for the alteration of existing rights, the contract may be challenged later in court and found to be unenforceable.
The easiest way for an employer to implement a written contract with an existing employee is to do so when the employee is being offered a raise or promotion, and to make such offer conditional on the execution of a written employment contract.
Peter Israel is the senior partner in the Toronto law firm of Israel Foulon LLP – Employment and Labour Lawyers. He can be reached at 416-640-1550 or pi@qtw38575.mywhc.ca. A version of this article originally appeared in the Carswell publication, Canadian Employment Law Today