Our company is looking to renew employment contract with all of the existing employees upon amalgamation of other business units into ours. I believe it is the good practice to offer some incentives to employees to sign the new contract (no big changes to the terms and condition of employment, just more information on the contract such as confidentiality, terminations etc). Do you know what kind of incentives can be offered for employees to sign the new contract?
Thanks in advance!
Yes, it’s not only a good idea, it’s legally required. That’s because contractual obligations and duties aren’t legally binding unless the person providing them receives what’s known as consideration, or something in value in exchange for the promise. To be considered adequate, consideration must provide something a person doesn’t already have. When you hire a new employee, furnishing employment is considered adequate consideration. But that’s not the case with employees you ALREADY employ. Those employees need to receive some other value that they don’t already have, like pay raises, additional benefits, schedule concessions, or just about anything else. Management needs to make a business decision on which form of consideration to offer based on finances and other circumstances affecting your organization.
Hope that helps. Glenn