Employment contracts should be reviewed and revised on a periodic basis. Courts have routinely found that a contract will not be upheld or enforced unless it reflects the reality of the employment relationship.
In Manthadi v ASCO Manu (2019 ONSC 5572) Fowler Byrne J. had a situation where a 64 year old welder had over 36 years with Company A. Company A sold its business to the Defendant. Company A paid the plaintiff her 8 weeks under the ESA and she signed a release. The defendant immediately hired her on the closing date. She was terminated a few months later.
It is the terms of an Equity Agreement, Shareholders’ Agreement or Stock Plan that determine employees’ rights with respect to shares. The common law relating to compensation for breaches of a contract of employment (i.e. reasonable notice) does not apply to shares where there is a distinct and separate agreement.