Can I Refuse to Sign a New Contract of Employment in Canada?

If your employer has asked you to sign a new contract of employment, it’s normal to feel pressured — and confused.

So let’s answer the key question clearly:

Yes. You can refuse to sign a new contract of employment.
And in many cases, refusing is the smart move.

Below is what Canadian employees need to know before signing anything.

Can I Refuse to Sign a New Contract of Employment?

Yes. An employer can’t force you to sign a new employment contract.

If you already have a job and an existing agreement (written or implied), your employer can’t unilaterally change those terms by putting a new contract in front of you.

Why Employers Ask Employees to Sign New Contracts

Employers usually introduce new contracts to:

• Limit severance pay
• Add or tighten termination clauses
• Reduce bonuses, commissions, or benefits
• Add non-compete or non-solicitation clauses
• Lock employees into less favourable terms

What Happens If I Refuse to Sign a New Employment Contract?

Refusing to sign does not automatically mean you lose your job.

Here’s how it typically plays out:

1. Your Original Terms Still Apply

If you say no and keep working, your existing employment terms remain in effect.

2. Your Employer Has Two Legal Options

Your employer can:

• Drop the issue and keep employing you under your current terms, or
• Terminate your employment and owe you full severance pay

What they can’t do is punish you, demote you, or quietly impose the new contract anyway.

Can My Employer Fire Me for Refusing to Sign?

They can terminate your employment — but that comes with consequences.

If you are fired for refusing to sign a new contract:

• It is usually considered a termination without cause
• You are likely owed significant severance pay
• Any attempt to rely on the new unsigned contract will usually fail

This is where many employers miscalculate.

What If My Employer Says “Sign It or Else”?

That’s a red flag.

Pressure tactics like:

• “This is mandatory”
• “Everyone else has signed”
• “You’ll lose your job if you don’t sign today”

often point to unenforceable or risky contract terms.

Can an Employer Change My Contract Without My Consent?

No.

Under Canadian employment law, major changes require employee consent.
Without consent, a significant change can amount to constructive dismissal.

This includes changes to:

• Pay or commissions
• Job duties or title
• Work location or hours
• Termination rights

Should I Ever Sign a New Employment Contract?

Sometimes — but only after it’s reviewed.

A new contract may be reasonable if:

• You’re receiving meaningful compensation in return (raise, promotion, bonus)
• Termination clauses comply with employment law
• Your severance rights are not being reduced

Key Takeaways for Employees

• You can refuse to sign a new contract of employment
• Your employer can’t force you to accept worse terms
• Signing may permanently reduce your severance rights
• If fired for refusing, you are likely owed full severance pay

Asked to Sign a New Employment Contract? Speak to an Employment Lawyer First

Before you sign — or refuse — get proper legal advice.

A quick contract review can:

• Protect your severance entitlements
• Prevent enforceable termination clauses
• Clarify whether your employer’s demands are legal