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Talkin’ ‘Bout Consideration!

By October 19, 2016July 2nd, 2021Employment Law

I heard this song on the radio this morning, and it went really well with an email I received from a Dentist today:

The line in the song “Talkin’ ’bout my generation!” stuck with me… and how could it not.  It was one of The Who’s top singles and is one of the best rock songs of all time.

But it stuck with me because all I thought of was how Employers need to give “consideration” to any employee to whom they are offering a contract after the commencement of employment. Or in other words, the employment contract has to be signed before the first day of work!

I know it is common for dentists to have a new assistant start working with them in a type of “working interview,” especially because there is a standard three-month “probation.”  But assuming things go well, an employer cannot just spring a written contract on an employee who has already started working (without a contract).

Courts in Ontario will not enforce contracts that make changes to employment terms unless the employer has given the employee something extra (usually a signing bonus), or given them enough notice of the impending contract.

The Fasullo Case: No Consideration given = Contract thrown out

This was made clear in the case of Fasullo v Investments Hardware Ltd., 2012 ONSC 2809 (and further confirmed in 2015 by the Ontario Court of Appeal in Holland v. Hostopia.com Inc., 2015 ONCA 762).  In the Fasullo case, the Judge decided that the employee had started working under a verbal contract in May 2007, and so the written contract given to (and signed by) the Employee in June 2007 was invalid.

The rationale behind this is that Ontario Courts recognize that there is a power imbalance between employers and employees, and that employees are more vulnerable than employers.  As well, continued employment is not good-enough consideration.  There has to be something extra accepted by the employee for the new contract to be valid.

Had that employer given the employee the contract in June 2007 and also a signing bonus, then the employer would have been successful.

So before you take on a new assistant or receptionist to try them out as a probation, speak to us first!  I’d be happy to chat Who and employment contracts.

 

DMC