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ARTICLE · 01 MAY 2023

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Employment Update: Enforcing Employment Contracts After Substantial Changes

Blaney McMurtry LLP
Blaney McMurtry LLP
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Most employers are aware of the importance and value of employment contacts, particularly for the purpose of setting out and limiting an employee's termination entitlements.

CanadaEmployment and HR

Most employers are aware of the importance and value of employment contacts, particularly for the purpose of setting out and limiting an employee's termination entitlements. However, many employers may not be aware that employment contracts are not always set in stone and risk going stale as roles change, grow and expand. In fact, changes over time to an employee's position, compensation or responsibilities can have an impact on the enforceability of the termination provisions in the original employment contract. This issue was recently addressed by the Ontario Court of Appeal in Celestini v. Shoplogix Inc.,2023 ONCA 131.

BACKGROUND

In 2002, Mr. Celestini co-founded Shoplogix as a technology start-up company. In 2005, he stepped down from his CEO role to that of a Chief Technology Officer ("CTO"). At the time Mr. Celestini became CTO, he signed an employment contract that limited his entitlements upon termination to a 12-month notice period. This contract

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