Employers will often have employees sign employment agreements after they start working. This can be very problematic in the long run, as highlighted by the Ontario Court of Appeal in Holland v Hostopia.com.
In Holland v Hostopia.com, the employee accepted a written job offer, which contained a statement that he would have to sign an employment agreement in the future. However, he was not presented with the employment agreement until nine months after he started work. The employment agreement provided for termination by notice as per the Employment Standards Act, while the original offer letter had said nothing about termination.
The Ontario Court of Appeal held that by saying nothing in the original offer letter about notice periods, common law reasonable notice was implied and without fresh consideration on signing the “new” employment agreement, that agreement could not be relied on by the employer on termination..
It is all well and good to have a well-drafted employment agreement. However, it is essential to ensure that a new employee signs it before they start and that existing employees receive consideration in exchange for signing. Otherwise, it may just end up being an expensive piece of paper…
