THE QUESTION
I was offered a raise, but my employer says I need to sign a new contract to receive it. Since I started working at the company, they changed their standard contract to have one less week of vacation. Is there any way I can be entitled to receive the raise without accepting the reduction in vacation days?
THE FIRST ANSWER
Ryan Edmonds and Christopher Gibson, Ryan Edmonds Workplace Counsel, Toronto
Your employer may be trying to pull a fast one on you, and it may have nothing to do with your vacation.
The law requires that if an employer wants to change or otherwise take away important employee rights, the employer must “buy” the employee’s agreement. Offering a raise attached to a fresh employment agreement is a common way for employers to buy an employee’s agreement to unfavourable changes to their employment.
The reduced vacation in your new employment contract is an example of an unfavourable change, but there could be other, more important changes: Your employer might be trying to limit your termination entitlements or acquire the right to place you on an unpaid layoff.
Employers don’t need to pay a fair price when they buy your agreement to unfavourable changes. A $100 raise could wipe out many thousands of dollars in termination entitlements – or more. The best thing to do when you are asked to sign an employment agreement is to have a lawyer review it for you.
To answer your question about vacation, there are some rights that your employer can’t take away. These employment standards are different in every province and often depend on factors such as your length of service. Assuming the employer isn’t trying to reduce your statutorily allotted amount of vacation, you’ll have to negotiate if you want to get the raise without giving up the vacation. In this job market that may be easier than you think.
THE SECOND ANSWER
Charles Osuji and Lydia Iboko, Osuji & Smith Lawyers, Calgary
Minor tweaks to an employment contract are usually acceptable, but significant negative changes are likely to be considered constructive dismissal. Consequently, an employer who wishes to change fundamental terms of the employment agreement should do so by offering some form of consideration for the employee. Employees can be offered something of value in exchange for agreeing to reduced vacation days. For example, it can be a one-time bonus, a promotion or a raise. For an amended employment contract to be legal, both the employer and employee must receive “fresh consideration,” which means both sides benefit from the agreement.
As your employer has offered you a raise in exchange for reducing your vacation days by one week, the legality of this new offer largely depends on whether the remaining vacation days satisfy the minimum vacation entitlement under your province’s employment standards code. Under Alberta’s Employment Standards Code, you are entitled to:
● A minimum of two weeks of vacation each year after 12 months of employment;
● A minimum of three weeks of vacation each year after five years of employment.
If you decide to sign the amended contract, you are still entitled to your vacation under the code. If the revised contract reduces your vacation entitlement to less than the statutory minimum it is illegal and a breach of the code. If, however, you still meet the employment standard threshold after your employer has reduced your vacation by one week, then the raise is sufficient consideration, and the contract is enforceable.
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