No, this isn’t a blog post about how you should celebrate the job offer that you just received (for the record, my vote is for biryani, ice cream and binge-watching Superstore). This post is about why you should cover your bases by seeking legal advice before signing an employment contract, even (and especially) if you were just offered your dream job.
Written employment contracts are not required in Ontario for non-unionized employees, and your employer may not require you to sign one. An oral or implicit agreement between you and your employer can still have the legal force and effect of a contract in law.
If your employer has presented you with a written employment contract, it may include some or all of the following:
- Job description which describes your duties, tasks, and responsibilities
- Compensation including salary, benefits entitlements, and shares or equity
- Bonus clause which sets out the criteria for bonus eligibility, how the amount will be determined, and your bonus entitlement during the notice period after termination
- Anti-constructive dismissal clause which permits your employer to drastically change your title, responsibilities, compensation, or even lay you off temporarily without pay
- Termination clauses (both with cause and without cause) which set out your entitlements to notice and benefits upon termination
- Confidentiality, non-competition and/or non-solicitation clauses which extend after your employment ends and could limit your future employment opportunities
- Mandatory arbitration clause requiring disputes to proceed to arbitration rather than in the courts
- Choice of law and jurisdiction clauses which address what law will apply and where any claims should be litigated
It’s common for employees to pay the most attention to their job description and compensation –often the most exciting aspects of the contract. I know that’s what I did when I got this job! However, other clauses in your employment contract, which may sound overly legalistic and confusing, also have a significant impact on your rights during and after your employment.
Regardless of what the contract drafted by your employer actually says, your rights are still governed by the minimum standards in applicable employment, health and safety, and human rights legislation. However, where the common law would offer you greater entitlements than minimum employment standards (such as for notice upon termination), your employer can legally draft an employment contract which contracts out of the common law and restricts your entitlements to minimum employment standards.
Your employer may also have included clauses that are drafted in an overly broad or unfair manner and would not be upheld at common law. Such clauses include certain non-competition, non-solicitation, or mandatory arbitration clauses.
Consulting an employment lawyer before you sign an employment contract will help you understand the contract your employer has drafted. An employment lawyer will be able to explain the legal implications of your contract as it is currently drafted, highlight concerns, suggest changes to make the contract more favourable to you, and assist you in negotiating improvements where appropriate.
As experienced employment lawyers who regularly review employment contracts and identify weaknesses in contracts drafted by employers, we are available to review your employment contract, and do so discreetly, efficiently and cost-effectively. The benefits of consulting an employment lawyer before you sign a contract outweigh the risks of signing a contract that you don’t understand since:
- The contract has been drafted by your employer to benefit them, not you
- Depending on your bargaining power as an employee, you may be leaving significant amounts of money on the table if you fail to negotiate amendments to the termination clause, bonus clause, or even other clauses like non-solicitation and non-competition clauses
- Securing a well-negotiated employment contract will provide you with clarity regarding your rights and entitlements during employment and after the employment relationship ends
Let us know if we can help you!
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If you are an employee and need help reviewing an employment contract, we can help. Don’t hesitate to contact Geetha Philipupillai or one of our other employment lawyers if you need assistance.