The promise of continued employment not sufficient consideration for changes to existing employment contract
A recent Ontario case - Hobbs v. TDI Canada Ltd., 2004 CanLII 44783 (ON C.A.) - has confirmed that the promise of continued employment is not sufficient consideration for changes to an existing employment contract.
In order to make changes to an existing employment contract employers should provide either:
- tangible consideration; or
- reasonable notice of the change (equivalent to the notice required to lawfully terminate the employment contract).
Refraining from terminating a person's employment may be sufficient consideration for new terms in an employment contract, but only if the employer is able to prove that it did not carry through on a clear prior intention to terminate the person's employment in exchange for the person's acceptance of the new terms.
"Jurisdiction Issues In The Employment Law Context" is the title of a paper prepared by Carman J. Overholt, Q.C., a lawyer at Fraser Milner Casgrain in Vancouver and articled student Matthew Stacey.
The paper was prepared for the Fraser Milner Casgrain LLP National Employment, Labour and Pensions Law Seminar held in Calgary, Alberta on October 27, 2004.
Published in Lawson Lundell Labour and Employment Newsletter (Winter 2004)
In a decision handed down on November 18, 2003 - Matheson v. Canadian Freightways Ltd., 2003 BCSC 1728 - the Supreme Court of BC considered the effect of a break in service on the notice period.
Matheson had commenced working for the defendant company in 1973. In October 1985, after giving one month's notice, he left the company and began working for a competitor. In July 1987, after a spate of unemployment, he once again commenced working for the defendant company.
On May 9, 2000, with no cause alleged, he was dismissed after eight months working notice. In determining what it believed to be reasonable notice, the company only took into account his latest period of unemployment.
Matheson filed a wrongful dismissal action claiming that the company should have treated him as if his service had been uninterrupted and based his notice on the full 27 years of service. read more »
David Little, a lawyer at Fraser Milner Cagrain, has written a newsletter article entitled, "Common Employment Pitfalls Facing Technology Companies" (October 2003).
Common employer doctrine allows employer to unilaterally assign employment contracts to related company
(Note: the same proposition is set out by the Alberta Court of Queen's Bench in Patillo v. Murphy Canada Exploration Ltd., 2001 ABQB 1070)
Wrongful dismissal lawsuit in Ontario stayed; arbitration clause required dispute to be dealt with in Ohio
In Ross v. Christian & Timbers Inc., 2002 CanLII 49619, the Ontario Superior Court of Justice ruled that a wrongful dismissal lawsuit in Ontario should be stayed in light of an arbitration clause in the former employee's employment contract that required disputes to be dealt with by an arbitration in Ohio and in accordance with Ohio law.
In reaching this decision, the court stated as follows:
read more »
The Manitoba Law Reform Commission has published a report entitled, "Good Faith And The Individual Contract of Employment" (December 2001). The report"
...examines the remedies for wrongful dismissal before the [Supreme Court of Canada's decision in Wallacev. United Grain Growers Ltd.,  3 S.C.R. 701] and alludes to the changing nature of the employment relationship. It describes the principles set out in Wallace in respect of bad faith dismissal and reviews the subsequent judicial interpretation and application of Wallace. Options for reform are then identified, followed by our recommendations for reform.