Changing an employment contract

Employees must receive something of value in exchange for a change to the contract
By Todd Humber
|Canadian HR Reporter|Last Updated: 06/21/2005

Changing an employment contract in the employer’s favour can be tricky. Courts have long recognized the inherent power imbalance between an employer and an employee, and employers are required to give employees something in return for a change in the employment relationship.

This something — known in legal circles as “consideration” — has to be of value to the employee. There’s an old saying in contract law that a single peppercorn can constitute consideration, but when it comes to a significant change to an employment contract, the employer will have to be prepared to offer a bit more than a handful of spices.

“Where you start to restrict the employee’s rights, and don’t provide fresh consideration, that is something courts will take issue with,” said Natalie MacDonald, an employment lawyer with Grosman Grosman and Gale in Toronto.