What Happened?

In the B.C. Supreme Court decision of Chowanetz v. Ivor Forest Products Ltd., 2026 BCSC 1760, an existing employee signed a new employment agreement containing a more restrictive termination clause that limited the employee’s entitlements on a without cause termination to the statutory minimums plus one week. 

Although the employee received a wage increase, a new RRSP matching program, and a bonus program around the same time as the contract, the Court held the new employment contract was not supported by any fresh consideration and therefore the contract (and termination provision) was unenforceable.

Why Was There No Fresh Consideration?

The Court found:

(a) The employee already had a contractual right to annual wage reviews under his original employment agreement and as such, the wage increase reflected an existing entitlement and not a new benefit;

(b) The RRSP matching commitment had already been made before the new employment agreement and was not referenced in the written contract, which contained an entire agreement clause; and

(c) The bonus program predated the new employment contract and appeared to exist independently of the new agreement.

What Should Employers Know?

For employers rolling out new employment contracts for existing employees:

• ensure the benefit being provided to an employee is genuinely something new;
• make it clear in the employment contract itself that the benefit is being provided in exchange for signing the employment contract; and
• ensure the benefit is not something the employee is already entitled to, or reasonably expects to, receive.