Decoding The Legal Jargon: A Comprehensive Guide to Understanding Your Employment in Canada – A Series By Christie Eze

Negotiating and Modifying Employment Agreements (Part 4)¹

Welcome to the fourth installment of our comprehensive guide to employment agreements. In this part of our series, we’ll explore the intricate process of negotiating and modifying these crucial documents. Negotiating and modifying employment agreements can be a pivotal aspect of securing a mutually beneficial arrangement between employers and employees. Whether you’re a prospective employee entering into a new contract or an existing employee seeking amendments to your current agreement, understanding the negotiation process and your rights to modify the terms are essential for securing favorable terms and protecting your interests. Mastering the art of Negotiating and Modifying Employment Agreements is an essential skill whether you are the employer or the employee.  

In this blog, we’ll explore the intricacies of this process, from initial negotiation to potential modifications and the role of legal professionals in the process. 

1. Contract Negotiation in Alberta 

Negotiating an employment agreement in Alberta involves a series of strategic steps aimed at reaching mutually acceptable terms between the employer and the employee.  Here’s a breakdown of the negotiation process. 

1. Understanding the Employer’s Offer: Comprehending the terms laid out by your prospective or current employer as well as the finer details such as termination clauses or non-compete agreements is essential as it serves as a determined starting point that enables you to identify your negotiation objective. 

2. Preparing for Negotiation: Its been said that “You don’t get what you deserve, you get what you negotiate.” ² Therefore, its critical to be armed with a clear understanding of the offer and your objective. The next step is to prepare for negotiation. This involves identifying your priorities, interests, and areas where you may seek modifications or improvements to the proposed terms. Researching industry standards for salaries and benefits as well as assess your worth based on qualifications and experience is a necessary aspect of preparation. Additionally, if you are an employee, anticipate potential counteroffers from the employer and have responses ready.  

3. Executing a Negotiation Effectively: Professionalism and clear communication is essential. It is important to clearly articulate your position and be prepared to walk away if the terms are not fair or satisfactory. 

2. Circumstances that May Trigger Contract Negotiation in Alberta

There are various circumstances under which you might seek to modify your employment agreement: 

• Change in Responsibilities: If your role within the company evolves significantly, you may negotiate adjustments to reflect these changes in your contract. 
• Market Changes: Economic shifts or industry trends may warrant modifications to compensation or benefits to remain competitive. 
• Personal Circumstances: Life events such as marriage, relocation, or family changes may necessitate alterations to your employment terms. 
• Performance Reviews: Positive performance reviews or achievements may provide leverage for negotiating improved terms. 

It’s important to understand your rights regarding contract modifications in Alberta. While employers have the prerogative to offer initial terms, employees also have the right to negotiate changes that align with their interests, circumstances as well as employment laws. 

3. Seeking Legal Expertise in Contract Negotiation and Modification in Alberta

Seeking legal expertise can be invaluable in navigating the complexities of contract negotiation and modification. Employment lawyers in Calgary, Alberta specialize in interpreting legal language, identifying potential pitfalls, and advocating for their clients’ best interests. 

A skilled employment lawyer can review proposed agreements, highlight areas of concern, and negotiate on your behalf to ensure fair and equitable terms. They can also provide guidance on legal rights, such as understanding the enforceability of certain clauses or the implications of specific language. 

There are some critical circumstances where it is advisable for an employee to seek legal guidance.  

1. New Employment Contracts: When entering into a new employment agreement, individuals are often presented with a dense array of legal terms and conditions. These documents, while ostensibly straightforward, can conceal hidden clauses or provisions that may have far-reaching implications for your career and well-being. In Wronko v. Western Inventory Service Ltd.³, the employee was promoted to management in 2000 and signed employment contract providing for two years’ pay on termination. In 2002 the employee was asked, and refused, to sign new employment contract providing for maximum of 30 weeks’ notice. The employer unilaterally altered the termination provision which would come into effect in two years. Four days after expiry of the two-year period, the President of employer sent an e-mail to the employee stating that new contract was in effect and if the employee did not wish to accept the new terms, then they did not have job for him. The employee brought action for damages against employer alleging wrongful dismissal. Trial judge held that employer could make fundamental change to contract on reasonable notice and held that the employee had quit. The employee appealed the decision and the employer cross appealed. The Appellate Court allowed the Appeal and dismissed the cross-appeal. The employee did not accept employer’s repudiation of contract and sued for damages, and the employer had  permitted him to continue working per terms of existing contract. Given the employee’s continued opposition to change in contract, employer’s dismissal of employee in 2004 was wrongful dismissal triggering termination provision in existing contract. The employee was entitled to two years’ termination pay. 

As such, seeking the counsel of a legal expert is not merely a precautionary measure – it’s a strategic imperative. Furthermore, it affords you the opportunity to negotiate favorable terms, address ambiguities, and ensure that the contract aligns with your professional aspirations and legal protections. In essence, investing in legal guidance at the outset can safeguard your interests and pave the way for a more secure and fulfilling employment journey. 

2. Non-Compete Clauses: Non-compete clauses represent a double-edged sword in the realm of employment contracts. While ostensibly designed to protect employers’ proprietary interests, these provisions can cast a shadow over employees’ career prospects and mobility. Understanding the nuances of non-compete clauses is paramount to navigating the intricate web of post-employment restrictions. In Canada, the enforceability of such clauses hinges on their reasonableness in scope, duration, and geographic extent. As highlighted in by Canadian legal precedent, including cases like ** Lyons v. Multari, 2009 ONCA 670, non-compete clauses must strike a delicate balance between safeguarding employers’ interests and preserving employees’ rights to pursue gainful employment. By seeking legal advice, individuals can assess the enforceability of non-compete clauses, explore potential exemptions, and chart a course towards maximizing their professional opportunities within the bounds of contractual obligations. 

3. Changing Employment Terms: The prospect of unilateral changes to employment terms evokes a sense of vulnerability and uncertainty among employees. Whether it entails modifications to compensation, job responsibilities, or working conditions, such alterations can trigger concerns about job security and fairness. In the eyes of Canadian courts, unilateral changes that significantly alter the fundamental terms of employment may constitute constructive dismissal—a legal concept that affords employees recourse in the face of adverse changes imposed by employers. Notable cases like **Evans v. Teamsters Local Union No. 31, 2008 SCC 20, emphasise the judiciary’s commitment to upholding employees’ rights in the face of contractual overreach. Individual who seek legal counsel can assess the legality of proposed changes, explore avenues for negotiation, and assert their rights in alignment with statutory protections and common law principles. 

4.  Termination Clauses: The termination clause stands as a linchpin in the employment contract, dictating the parameters of severance entitlements and notice obligations in the event of job loss. Yet, its significance often belies its complexity, as Canadian courts have meticulously scrutinized termination clauses to ensure compliance with statutory requirements and legal standards. From the landmark decision in **Machtinger v. HOJ Industries Ltd., 1992 SCC 14, affirming the principle of reasonable notice, to subsequent rulings emphasizing clarity and enforceability, such as **Waksdale v. Swegon North America Inc., 2020 ONCA 391, the jurisprudence surrounding termination clauses reflects a commitment to fairness and equity in employment relationships. Through legal consultation, individuals can decipher the intricacies of termination clauses, ascertain their entitlements, and, if necessary, challenge provisions that run afoul of legal norms. 

Juriansz J.A in Hobbs v. TDI Canada Ltd.,⁴ stated that, “Accepting an offer of employment and committing the next stage of one’s career to a new employer is an important life decision that most people make carefully” and I can’t agree more. By seeking the expertise of legal professionals, individuals can navigate employment agreements with confidence, clarity, and a steadfast commitment to safeguarding their rights and interests.  

Negotiating or modifying employment agreements in Calgary, Alberta require careful consideration, preparation, and sometimes legal expertise. By understanding the negotiation process, asserting your rights, and seeking appropriate assistance, you can strive for a mutually beneficial arrangement that meets your needs and safeguards your interests in the workplace. If you require legal expertise in navigating this process do not hesitate to contact Osuji &Smith Employment Lawyers.