Changing term length when renewing contract

Clarity in term length is key for all contracts
By Tim Mitchell
|Canadian Employment Law Today|Last Updated: 04/08/2009

Question: We originally signed an employee to a three-year contract for a general manager position. The contract is coming up for renewal and we want to offer a one-year term but otherwise the contract is the same. Can we change the term for the new contract? Would it be different if the employee had more than one three-year contract renewed in the past?

Answer: Generally speaking, absent express wording in the contract, the ability of the employer to change the term of the contract does not differ, even after multiple renewals. However, clarity in the wording of fixed term contracts is key. The termination and renewal provisions should be highly scrutinized for any employee notice requirements. The change in the duration of the term of the contract should also be made expressly clear to the affected employee, and she should have the option of seeking independent legal advice prior to signing the new contract.