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Contract Enforceability: When should the employment contract be signed?

Whitten and Lublin | Jan 23, 2018

To determine the enforceability, the courts will examine whether the parties to the employment agreement contemplated the term/clause in question before the employment relationship (ie. the first day of work) began. This usually means the terms of employment that are agreed upon are followed by a benefit not already in effect, such as money (ie. salary/wage agreement), with some time given to the employee before agreeing. Thus, if the employee had already started working or is given the contract the day of his/her start date, it is harder to show that the terms of employment were contemplated by the employee rather than imposed by the employer.

In the case of Wood v. Fred Deeley Ltd. (ONCA 2017), some insight was offered to the topic at hand. Deeley having signed the employment contract after starting actual work, the court maintained: “the signing the day after she started working was no doubt a matter of administrative convenience. Deeley did not unilaterally impose a new term of her employment. Fresh consideration (i.e. payment/money) was therefore not required”

In this case, the employer was able to show an exchange of information negotiating the employment contract, and that the employee here, Deeley, did not see her contract for the first time on her start date; she had been given a copy via email beforehand. Further, no new terms had been added to the contract, and there was a week in duration between the time Deeley saw the initial contract and her start date.

Overall, employers should be able to establish that the employment contract, or at least the terms of the agreement, were negotiated before the start date of employment if the contract is signed the day of, or shortly after. Failing to do so may turn out costly, depending on which terms of the agreement are challenged for enforceability. When seeking to add new terms to an agreement after or immediately before the commencement of employment, it is important to seek the advice of an employment lawyer.