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Employment contracts are not always enforceable

Alberta employers and employees may be surprised to learn that some employment contracts are unenforceable. An example would be a contract signed after both parties agree to engage in an employer-employee relationship. New employees are often required to sign contracts, such as a non-compete agreement, on their first day at work, which changes the agreed upon terms of employment. Unless an attempted change offers consideration for the employee, it may not be enforceable.

Employment contracts are also unenforceable in the absence of a properly executed copy. If a contract cannot be produced or if it is not signed, it is unenforceable. However, when a contract is included as an integral part of a written offer that is accepted by the employee, the contract is enforceable, whether signed or not. In addition, to be enforceable, a contract must also meet the latest minimum provisions contained in the Employment Standards Act. It is not enough that the contract was in compliance when it was executed. It must also meet newly revised provisions.

A contract pertaining to a position the employee no longer holds may also be unenforceable. This happens frequently when employees are promoted. Provisions that applied to the original position do not apply to the present position. To circumvent this, some employers require a new contract to be executed when an employee is promoted or given a raise.

Employment contract disputes may occur because of enforceability issues or for other reasons, such as the meaning of a particular clause or human rights issues. Although contract disputes can be resolved through litigation, it is often more beneficial to resolve them through negotiation. Anyone who needs representation while attempting to resolve an employment contract dispute may want to seek the services of a lawyer who has experience in Alberta labour law.

Source: Financial Post, "When can an employment contract be set aside?", Howard Levitt, September 02, 2014

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Ridout Barron
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