Changes to the Employment Contract
Although a contract is usually signed at the start of the relationship, the employment contract is not necessarily frozen in time. Instead, it often evolves after the initial hiring has occurred. New and modified terms of a contract can occur where an employee has been with an employer for a long period of time and where there have been changes such as promotions, organizational restructuring, increases to remuneration, and other factors, which have been mutually agreed to, either expressly or by the parties’ conduct.
It is important to note that changes to an employment contract are not valid unless the employee and employer were provided “fresh consideration”, which means a benefit for both parties. For example, if an employee was given a raise or offered a higher position or increased benefits in exchange for a new contract, then the contract would be valid. However, if the employee was unilaterally given a new contract without any new benefit of any kind, (i.e. raise, bonus, better insurance plan, etc.) then the new contract would be unenforceable.
Fresh consideration is just one of many issues raised by new employment contracts. Other issues (and things to consider doing if not already included in the employment contract) include the insertion of a termination clause, a restrictive covenant, or changes to vacation days to offset overtime expenses.
Contact Mackenzie Law today if you would like to learn more. We offer a free consultation.