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ARTICLE · 18 SEPTEMBER 2024

Review Employment Contracts Regularly Or Risk Incurring Extra Costs

Hum Law Firm
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Too often, employers are surprised when their "perfectly drafted" employment contracts become obsolete at critical moments, resulting in unexpected costs or even legal disputes.

CanadaEmployment and HR
Lai-King Hum
Lai-King Hum

Too often, employers are surprised when their "perfectly drafted" employment contracts become obsolete at critical moments, resulting in unexpected costs or even legal disputes. Unlike other long-term commercial contracts, which are updated only when parties modify their deals, employment contracts require routine reviews to remain enforceable. Otherwise, the contracts, on which employers spent time and often legal fees, may fail to protect them or, worse, become a source of liability.

When reviewing employment contracts, employers need to consider several factors.

Has the nature of employment changed?

The nature of employment may have fundamentally changed, necessitating a new contract. For example, an employee's job description may evolve to the point that they can argue, "The current job I am working on is so different from the one when I signed the employment contract, so the contract is obsolete." In Celestini v. Shoplogix Inc., 2023 ONCA 131, the Ontario

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