Can an employer require a minimum tenure?

February 8, 2010 7:41 AM

Asking for a friend: Is it legal for an employer (in Ontario, Canada) to structure an employment contract that requires the employee to stay and work for the company for a minimum period of time (say, one year)?

My friend has been working for this organization for a while and in the past, she applied under the professional development program to get support for a study trip, and they told her they would only support it if she signed a form saying that she would work for them for a minimum of year once completing the training. She declined and paid for it herself.
Her job is now being restructured and she has to reapply for the position. She is concerned that any contract offer will come with something similar, where they may try to compel her to stay with the company for a year. This is different than a notice period (which does have a bit of guidance material out there). Can an employer do this? Seems a bit like indentured slavery to me, and some searching through the Ontario Ministry of Labour doesn't appear to touch on the issue.
I know you are not a lawyer, my lawyer or my friend's lawyer. Asking for guidance and past experience if you have it. Thanks in advance!

posted by Cyrie to work & money (9 answers total)

When I've seen stuff like that (usually for relocation costs) it's "You must work for the company for one year OR pay back all relocation costs." Are you sure that wasn't what was going on there? If it is, it's unlikely that it'd come up in a different context.
posted by restless_nomad at 7:45 AM on February 8, 2010

The company wants to ensure that your friend won't leave after the company pays for training. I've seen examples of this a bunch of times. At my job, there is a career path that requires two years of technical training. The people going through this training have to sign a 5 yr contract because it is very expensive training and the company doesn't want to lose the employees to a higher bidder after paying for their training.
posted by nuke3ae at 7:50 AM on February 8, 2010 [1 favorite]

It is very common to require you to stay a certain amount of time after they pay for training or repay the (prorated, sometimes) costs of this training. A contract offer is unlikely to have a similar restriction.
posted by jeather at 8:05 AM on February 8, 2010

Golden handcuffs are common in the management consulting world where your employer paying for you to do an MBA and paying you a subsistence grant while you do so is common.

Want to leave before two years or so? No problem – but we’ll have the fee and grant back please. Likely to be the same deal for your mate.
posted by dmt at 8:07 AM on February 8, 2010

She is concerned that any contract offer will come with something similar, where they may try to compel her to stay with the company for a year.

It's not clear what the concern is. There’s obviously nothing unusual about a one-year employment contract. She can always break any such contract. They can’t “compel” her not to break her contract, but there could be certain penalties set out for breach of contract. Not sure what those would be, though costs for training are reasonable if she’s going to receive further training; much more would likely not even be proposed by the company. Courts will award damages against employers in breach of contract cases; they won’t force an employee to go back to work, as that is, as you say, like slavery.
posted by Dasein at 8:15 AM on February 8, 2010

For the record - they can't force them to work. However, a damages claim should work just fine. My friends are doing a moot problem on this very subject in a week, so it's not entirely clear (we're in NB, but the precedential value comes from any canadian cases).

But it's a reasonable clause, provided it's not unconscionable on other reasons (it's too long, there is a penalty clause rather than just damages to restore), and should be fine.
posted by Lemurrhea at 8:17 AM on February 8, 2010

I've signe da similar contract in relation to Relocation Costs. (to stay on 12month OR I had to replay). And I've heard of it where the company has made a substantial investment in a person via Studies / training etc.

Its not uncommon.
posted by mary8nne at 9:01 AM on February 8, 2010

Ok, thanks for the responses everyone. Sounds like it's more of a training/relocation thing, neither of which apply in this case - she's decided to pay for any further training or educational trips out of pocket (the job does not require highly technical training), and there is no relocation, since it's the same office, just a reposted job.

I'll tell her to look at notice requirements and penalties in any contract that she's presented to make sure she can live with them or negotiate them if possible.
posted by Cyrie at 9:11 AM on February 8, 2010

I've signed contracts similar to this when moving within a company (agreeing to stay in my current role/location for one year), and I'm in Ontario.
posted by smitt at 11:12 AM on February 8, 2010