January is the month for resolutions, fresh starts and, for far too many employers, the annual exercise in corporate self-sabotage disguised as an ‘updated’ company handbook.
Across Canada, HR departments are busily circulating ‘enhanced’ codes of conduct and ‘modernized’ employment policies. But what looks like routine housekeeping often carries unforeseen legal consequences. Courts have been delivering a blunt, consistent message: employers cannot unilaterally rewrite employment terms under the guise of a New Year reset without exposing themselves to massive wrongful and constructive dismissal claims.
The most common pitfall in the ‘New Year, New Handbook’ ritual is the failure to provide fresh consideration, i.e., something of value in exchange for the new or modified term.
Under Canadian law, you cannot simply hand an existing employee a more restrictive set of rules — a shortened notice period, a harsher disciplinary regime or tighter control over how and where work is done — and expect them to be enforceable. Continued employment is not consideration. That is a legal nullity.
This was reaffirmed yet again by the Ontario Court of Appeal in Giacomodonato v. PearTree Securities Inc. (2024). Contract modifications are only binding if both sides receive something of value.
To make new policies stick, employers must offer a tangible quid pro quo: a signing bonus, a salary increase or even an extra week of vacation. Without that, a January update is a legal mirage —...
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