If employers intend for their employment contracts (and any related documents such as confidentiality agreements) to be binding then the contracts have to be signed as part of the offer of employment. If the contract is signed at a later date, then the consideration for the contract is past consideration, and so the contract is likely not binding.
Consideration
As part of any contract, consideration, or something of value must flow from the employer to the employee.
The Albert Court of Appeal looked at the issue of consideration in the case of Beazer v Tollestrup Estate, 2017 ABCA 429.
The Court said at paragraph 40:
A contract requires consideration. Consideration is “some right, interest, profit or benefit accruing to the one party or some forbearance, detriment, loss, or responsibility, given, suffered, or undertaken by the other”: Yellowhead Regional Library Board v Spruce Grove (Town), 1982 ABCA 369 (CanLII) at para 7, 143 DLR (3d) 188. If the act or forbearance has passed and is independent of the giving of the promise, this is “past consideration” which is generally insufficient to create a valid contract: Fridman at 109 citing Eastwood v Kenyon (1840), 11 Ad & E1 438 (Eng KB)). A moral obligation arising from a past benefit is not good consideration: Grant v Von Alvensleben(1913), 13 DLR 381, 1913 CarswellBC 241 (WL Can) at para 6 (CA) [Von Alvensleben cited to WL Can]. A subsequent promise is only binding when the request, the consideration and the promise, form substantially one transaction: ibid at para 7.
Threatening someone with firing if they don't sign an updated contract has been found to be insufficient consideration.
If you are wondering if your employment contract is binding, please feel free to contact us.
The information contained in this article is not legal advice. No solicitor client relationship is formed through this article. The reader is encouraged to retain counsel for advice in these matters.
