amendment to employment contract

Amending Employment Agreements and Policies During the COVID-19 Pandemic

For Ontario businesses continuing to operate, amending employment agreements and policies post COVID-19 pandemic is crucial for their continuation and survival.

Many businesses have switched to work-from-home models to adjust, meaning employment agreements and policies may need to be changed to deal with the new realities of working remotely. As an employer, it is vital to know your options when it comes to employee management and policy flexibility during this unprecedented time.

Why COVID-19 May Require an Employer to Amend Employment Agreements

For many Ontario businesses, the terms of employment and workplace policies tend to be tailored towards an in-person setting that requires employees to be present at a work location.

In a remote work setting, employees’ duties and policies may need to be adjusted to ensure that employees continue to maintain productivity, have a thorough understanding of their tasks and duties, and that employers maintain an efficient way of communicating with their workforce.

Amending Employment Agreements

If an employer is changing a minor term of employment, something not fundamental or related to compensation, they are generally able to make the change. However, they may want to ensure the employee is informed in advance of the change out of courtesy.

When it comes to amending a fundamental term of the employment contract, there are two methods established by Ontario common law to ensure the amendment is enforceable:

The first method is to offer something beneficial to an employee to offset a negative change, also known as offering consideration. If the employee accepts the change and consideration, the amendment is valid. When consideration was offered and whether the consideration is an actual benefit to the employee are considerations which may affect the validity of the amendment.

The second method is established by the Ontario case Lancia v. Park Dentistry, 2018 ONSC 751, and requires that an employer provide reasonable notice of a fundamental change and end of the old employment contract to transition the employee into a new contract without consideration. If the employee does not accept the change, they are effectively dismissed. What is reasonable notice will depend on the employment contract in place and on case law.

An improper amendment to an employment contract may result in an employer being liable for damages. As it can be difficult to determine what is considered sufficient consideration or what reasonable notice of an amendment should be, employers should consider consulting with a lawyer before attempting any employment contract amendments.

Amending Workplace Policies

Workplace policies may also need to be amended during this time.

To be enforceable, workplace policies must conform with relevant provincial and federal legislation and must also be accepted with consideration. Policies presented to employees after they have signed their employment agreements will require fresh consideration.

Changes to policies may also be accepted and enforceable by providing reasonable notice of the fundamental change.

Employers should consult with a lawyer to ensure any workplace policy amendments are presented and implemented properly to avoid the risk of any constructive or wrongful dismissal claims made against them.

Contact Us

If you are an employer and wish to amend an employment contact or workplace policies, or an employee who has questions about changes to your employment, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at +1 (866) 508-2548 or email us at [email protected] and we would be happy to assist.

If you are a small or medium-sized company looking for full-service support with same day response, visit our CLO Program page for our strategic solutions.