12 May Risks of asking employees to sign employment agreements after accepting initial offers
In Holland v. Hostopia.com, the Ontario Court of Appeal illustrated the risk of asking an employee to sign an employment contract months after accepting an offer of employment. Where the new contract purports to limit the employee’s legal rights beyond what was outlined in the offer, without new consideration, the contract may be deemed unenforceable.
In this case, the contract purported to limit the employee’s right to notice of without cause dismissal to the legislative minimum. Despite the employee stating in writing that such contract was not signed under duress and that he had an opportunity to obtain legal advice, the Court refused to uphold the contract and awarded pay in lieu of 8 months’ notice.