Is a change to an employment contract enforceable in Ontario if the employee didn't get anything new in return?
Generally, no. Ontario contract law requires fresh consideration, meaning something new of value flowing to the employee, for a change to an existing employment contract to be enforceable. Continued employment alone is not treated as sufficient consideration for a new or amended term, such as a reduced entitlement on termination, a new restrictive covenant, or a changed bonus structure — an employer can't simply present new terms and rely on the employee staying on the job as what makes the change binding.
This surprises many employers who assume that because the employee kept working after the change was introduced, they must have accepted it. Courts look for something genuinely new given in exchange, such as a signing bonus, a raise, a promotion, or another real benefit tied specifically to accepting the new terms. Without that, a court can find the amendment unenforceable, leaving the original contract terms in place, or in some cases treat a significant unilateral change as a constructive dismissal.
Employers wanting to change contract terms with existing employees should build in real consideration as part of the change, and document it clearly, rather than assuming a memo or a revised contract takes effect on its own once it's handed over.
Key takeaways
- Amending an employment contract generally requires fresh consideration, not just continued employment.
- Continued employment by itself is not enough to make a one-sided change binding.
- Courts look for something new of real value given in exchange for the change.
- A significant change imposed without proper consideration can risk a constructive dismissal claim.