How do you deal with a situation wherein an employee is told to sign a contract after his or her job has already started? Can this contract be challenged without the risk of one loosing their new job?
Employees in Canada are entitled to fair severance payments upon their termination, unless there is a contract that specifies some other amount. For that contract to be enforceable, employees must first voluntarily agree to the contract, otherwise it may be set aside. When an employee is given a contract after he or she starts a new job, the contract must provide them with something of additional value in exchange for signing the contract.
Anthony Fasullo experienced this situation on his third day of work with Investments Hardware Ltd., when he was asked to sign an employment contract, without previously being informed of a substantial limitation on any additional severance upon a termination. Considering that he had resigned from his previous job just few days prior to that in order to accept this new position, he was left with no choice but to sign this new contract.
A few years later, Fasullo was fired and Investments Hardware Ltd., sought to enforce that contract in order to pay him a small amount of severance. Recently, a judge struck down the contract and awarded Fasullo damages for wrongful dismissal.