Ottawa employers who drafted employment contracts years ago and never looked at them since may be in for a costly surprise — those agreements could be unenforceable the moment they're tested.
That's the warning from legal experts writing in the Ottawa Business Journal, who caution that employment agreements are far too often treated as "set it and forget it" documents. In reality, a contract that was perfectly valid when signed can lose its teeth over time, and the consequences can be significant.
Why Contracts Expire — Even Without an Expiry Date
Employment law in Canada is not static. Legislation evolves, court decisions shift what's considered acceptable in a contract, and what was once a legally sound termination clause can become void after a new ruling. Ontario and federally regulated workplaces in the Ottawa region have seen steady changes to the Employment Standards Act and related statutes over the past decade, covering everything from termination pay to non-compete clauses.
If a contract contains language that's been rendered illegal or simply outdated by new legislation, courts may throw out that specific clause — or in some cases, invalidate a broader section of the agreement entirely. That could mean an employer who believed they had a capped severance exposure suddenly faces common law reasonable notice, which can run into months or even years of pay for a long-tenured employee.
Business Changes Can Also Sink a Contract
It's not just the law that moves the goalposts. Changes within the business itself can affect enforceability. Promotions, pay increases, significant changes in job duties, or shifts in reporting structure can all create what lawyers call "fresh consideration" issues — essentially, whether the original contract still reflects the actual employment relationship.
An employee who was promoted three times since signing their initial agreement may successfully argue that the original contract no longer governs the terms of their employment. Ottawa businesses that have scaled up, restructured, or pivoted over the years are particularly exposed to this risk.
The Fix Is Simpler Than the Problem
The good news is that maintaining enforceable employment agreements doesn't require a legal overhaul every few months. Most experts recommend a structured review every one to two years, or whenever a significant event occurs — a promotion, a change in ownership, or a major legislative update.
When updating contracts, employers should ensure employees receive fresh consideration — something of genuine value in exchange for signing the new agreement. A promise of continued employment alone is generally not enough under Canadian law. A signing bonus, an extra week of vacation, or a formal promotion can all qualify.
For Ottawa's growing small business community and the city's expanding tech and professional services sectors, getting this right upfront is far cheaper than litigating a wrongful dismissal claim later.
Don't Wait for a Dispute to Find Out
The worst time to discover your employment contract is unenforceable is during a termination dispute. By then, the legal fees and potential liability have already accumulated. A proactive review with an employment lawyer — ideally one familiar with Ontario's evolving landscape — is the kind of low-cost insurance that Ottawa business owners shouldn't overlook.
If your employment agreements were drafted more than two or three years ago, or if your business has changed significantly since then, now is a good time to dust them off.
Source: Ottawa Business Journal
