Backdating an employment contract start date
However, to the company's disappointment, these employees were not hired until after the company's current employees filed their application to unionize, making the new employees unable to participate.
It’s not unusual for parties to a contract to want the written agreement to cover a period before it’s actually signed.
On appeal, the Missouri Court of Appeals, Western District agreed.
Let’s take a look at the different possibilities, and what you need to know to understand the all-important “when” of an agreement.
Additionally, where the backdating of an agreement affects the taxes that are imposed (or not imposed) on one of the contracting parties, courts will generally only respect the backdating provisions as between the contracting parties.
A court will generally not enforce the backdating provisions as between a taxpayer and the applicable tax enforcement agency (such as the Canada Revenue Agency).
This is reflected in the Linklaters article Execution of Documents: Five Common Questions Answered, which offers the following advice for in-house lawyers: “(i) contracts may only be backdated, absent fraud, in circumstances where an original form has been lost or where terms have been fully agreed but signatures have been left to a later date and (ii) deeds may never be backdated.” Unfortunately, the article offers scant authority, and a search on Google reveals little else on the subject from the commonwealth world.
Such relation back or forward contravenes no principle of law and is determined by the intent of the parties as deduced from the instrument itself.” As a practical matter, the proper date to put on an agreement is something that corporate counsel is likely to have to make a judgment call on quite often.
This is because documents take time to draft, negotiate and execute.
Although backdating is generally permissible under the common law, a court will not give effect to backdating where the parties backdated the contract to mislead a third party.
For example, in a company’s employees were interested in unionizing.
If a contract does not specify its effective date, it goes into effect on the date it was signed by the person to whom the contract was offered for a signature.