COVID-19 has presented some unique challenges for employers this year – employee contracts being one of them. Recent changes and clarifications in the BC Employment Standards Act have prompted some business owners to revise their employee contracts.


If you are considering modifying your employee contracts, this blog explains some factors employers should consider. 

Why should employers be careful about updating employee contracts?

You cannot change an employee’s contract without their knowledge, preferably by written consent. If an employer changes an employee contract without their knowledge, it could lead to an employee claiming constructive dismissal and result in you having to pay out a severance and/or other amounts.   

When do you need to update employee contracts?

Recently BC saw an economic downturn caused by the global pandemic, COVID-19, leaving many local businesses in a precarious position financially. If your business has to temporarily close down to reserve cash flow, are you legally allowed to lay off staff? It’s important that you follow the government’s employment standards for termination


If your business has previously used boilerplate or other non-customized contracts from the web, you’re less likely to be protected against lawsuits from ex-employees with these substandard templates. 


To protect your business from potential lawsuits, your employee contracts should contain legal and enforceable termination provisions in addition to: 

  • Language and terms that are compliant with the Employment Standards Act 
  • Your right to temporarily layoff your employees
  • Your right to modify salaries and job duties
  • Provisions for employees working from home
  • Intellectual property protections


And of course, never have a new employee begin work without first having an employee contract in place

How to properly modify an employee contract in BC

In order to legally amend an employee contract you must obtain the employee’s consent. In addition, in order for the new contract to be considered legally enforceable, there must be an exchange of valuable consideration. 


Basically, this means that there is an exchange of mutual benefit to both employer and employee. Valuable consideration could come in the form of the following:


  • Signing bonus
  • Promotion with an increase in salary
  • Improved benefits package 
  • Increased vacation time

It is essential that you present the employee with these considerations when presenting changes to their contract. 


An employer must also give an employee reasonable notice of the proposed adjustments to their contract. The length of this notice is typically the same as a ‘dismissal without cause’ which means for every year an employee has been with the company, they are entitled to 1 week of notice. Three years would equate to three weeks’ notice to accept or reject the proposed changes. 


During this notice period, the employee has the opportunity to negotiate the amendments made to their employment contract, or to find new work if they object to the proposed new employment terms and conditions offered. 


If your employee decides to reject the proposed changes to the employee contract, you have two options:

  1. You can dismiss the employee without cause, by providing appropriate notice or pay in lieu thereof; or
  2. You can accept that there are no changes to be made to your employee’s contract and continue the employment relationship on its current terms. 


Before presenting these options to an employee, we encourage you to seek legal advice, as every employer’s decision should be made on a case-by-case basis to find the best solution for both employer and employee. 


When making adjustments to your employee contracts, it is imperative that you adhere to the law in your jurisdiction and the Employment Standards Act to avoid any potential lawsuits. We recommend consulting with a professional lawyer to review and draft employee contracts. Our small business lawyers in Vancouver can provide you with a free consultation when you contact us at 604-227-2892.