January is the month for resolutions, fresh starts and, for far too many employers, the annual
exercise in corporate self-sabotage disguised as an “updated” company handbook.
Across Canada, HR departments are busily circulating “enhanced” codes of conduct and “modernized” employment policies. But what looks like routine housekeeping often carries unforeseen legal consequences. Courts have been delivering a blunt, consistent message: employers
cannot unilaterally rewrite employment terms under the guise of a New Year reset without
exposing themselves to massive wrongful and constructive dismissal claims.
Consideration crisis
The most common pitfall in the “New Year, New Handbook” ritual is the failure to provide fresh
consideration, i.e., something of value in return for the changes the employer is obtaining from
the employee.
Under Canadian law, you cannot simply hand an existing employee a more restrictive set of
rules — a shortened notice period, a harsher disciplinary regime or tighter control over how and
where work is done — and expect them to be enforceable. Continued employment is not consideration. That is a legal nullity.
This was reaffirmed yet again by the Ontario Court of Appeal in Giacomodonato v. Peartree
Securities Inc. (2024). Contract modifications are only binding if both sides receive something of
value.
To make new policies stick, employers must offer a tangible quid pro quo: a signing bonus, a
salary increase or even an extra week of vacation. Without that, a January update is a legal
mirage — impressive until it evaporates in court.
Return-to-office illusion
January is also when many employers attempt to ‘reclaim’ the office. This, too, is a legal minefield.
What employers need to consider to when updating company
handbook.
National Post · 14 Jan 2026 · Howard Levitt and Candice Malan
Recent jurisprudence makes it clear that workplace flexibility is no longer a temporary pandemic perk. It has become, in many cases, a vested contractual right.
In Byrd v. Welcome Home Children’s Residence Inc. (2024), the Ontario Superior Court held that
recalling an employee after more than a year of remote work constituted constructive dismissal.
British Columbia followed suit in Parolin v. Cressey Construction Corp. (2025), where longstanding flexible arrangements were found to be implied, binding terms of employment. Alberta
went even further in Nickles v. 628810 Alberta Ltd. (2025), ruling that a 37-year remote arrangement was so fundamental to the contract that a return-to-office mandate was a wholesale
breach.
Employers who abruptly impose a January return-to-office edict without consent or meaningful
notice are not “managing” their workforce. They are financing early retirements. By unilaterally
changing the location of work, they hand employees the legal ammunition to walk out and sue
for every penny of common-law notice — all in the name of filling cubicles.
Termination-clause trap
Perhaps the most dangerous piece of January housekeeping is tinkering with termination provisions.
Many employers assume if a new policy appears in the handbook, it automatically overrides
prior contracts. Wrong.
If a handbook purports to reduce notice or severance entitlements without explicit agreement
and fresh consideration, it is legally void. Worse still, attempting to enforce an illegal or unconscionable termination clause can void all termination protection, leaving the employer exposed
to full common-law reasonable notice.
How to survive the reset
So how can employers avoid turning a simple update into a multimillion-dollar mistake?
❚ Consult counsel, not just HR: Determine which provisions are actually incorporated into contracts. If you are changing core terms like pay, hours, location or termination, a policy update
will not suffice. You need a new agreement.
❚ Pay for the change: If you want a restrictive policy to be enforceable, attach a modest bonus or
raise. Consideration is the cheapest insurance policy you will ever buy.
❚ Communicate, don’t command: Courts loathe ‘takeit-or-leave-it’ ultimatums. Dropping a 60-
page PDF on Monday with a Friday signature deadline is an invitation to litigation.
❚ Use a slow-motion recall: If office attendance is truly necessary, give ample advance notice. The
more gradual the change, the harder it is to characterize it as a sudden contractual breach.
January is a month for resolutions. For employers, the only one that matters is this: stop treating
employment contracts like a suggestion box. Respect the contract, respect the timing and
respect the law.
Howard Levitt is senior partner of Levitt LLP, employment
and labour lawyers with offices in Ontario, Alberta and British Columbia. He practises employment law in eight provinces and is the author of six books, including The Law of Dismissal in
Canada. Candice Malan is an associate
at Levitt LLP.
YOU CANNOT HAND AN EXISTING EMPLOYEE A MORE RESTRICTIVE SET OF RULES — A
SHORTENED NOTICE PERIOD, A HARSHER DISCIPLINARY REGIME OR TIGHTER CONTROL
OVER HOW AND WHERE WORK IS DONE — AND EXPECT THEM TO BE ENFORCEABLE.
— HOWARD LEVITT & CANDICE MALAN