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The Dangers of Changing Employment Terms in Ontario During COVID-19

When it comes to changing employment terms in Ontario during a pandemic, some employers wrongfully assume they have broad liberties. In the midst of the COVID-19 health crisis, some employers have changed or have sought to change the employment contracts they have with current employees to reduce the financial harm caused by the pandemic.

These changes have included the reduction of wages, hours, or even the complete removal of certain benefits. While many of these changes might only be temporary, employers have in some cases used this time to introduce completely new employment contracts.

The effect of COVID-19 on employers is no secret, having been the main cause of employee layoffs and dismissals due to difficult economic times. However, where an employer intends to introduce a new employment contract, it should be done with great caution for the following reasons:

When an employee is already bound by an employment contract, and the employer attempts to introduce a new contract that removes or limits certain entitlements, the employer will need to provide the employee with a new benefit (otherwise known as fresh consideration) in exchange for signing the contract. A failure to provide the employee with a new benefit could render the new agreement void. Whether what was offered is considered fresh consideration is a factual question that should be evaluated on a case-by-case basis.

While the Government of Ontario has permitted employers to temporarily alter material employment terms such as wages and hours, the Ontario Regulation 228/20 does not necessarily protect against common law constructive dismissal claims.

As the Ontario Regulation 228/20 only covers the period between March 1, 2020 and six (6) weeks after the emergency declaration is lifted, employees who consent to temporary changes and reductions should not be assumed to have consented to those changes permanently.

For these reasons, the best course of action for an employer is to have a properly drafted contract with consideration to new law, the current health crisis, and the enforceability of such a contract. Employers should also seek legal advice to ensure the timing and consideration of the new contract is proper. Changing employment in Ontario terms midstream is to be avoided without proper advice.

Employees should also be prudent in seeking legal advice any time a new employment term or contract is being introduced, particularly before those contracts are presented to employees and before they sign any document.

Contact Us

If you are an employer looking to draft or update your employment contract, or an employee seeking to clarify your rights, 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.