Employment Contracts: Tips for Drafting

Ontario Employment Contracts: 3 Proven Drafting Techniques

Drafting a comprehensive employment contract is significant for any business. It requires careful attention to detail and a thorough understanding of the legal framework to anticipate any potential issues that may arise between employers and employees. 

This article provides practical guidelines for drafting employment contracts in Ontario, emphasizing the inclusion of standard clauses, the importance of clarity and specificity, and compliance with the Employment Standards Act, 2000 (ESA).

Include Standard Employment Contract Clauses

Adding standard clauses in your employment contract is a good starting point towards crafting a well-rounded, legally sound contract. These clauses lay out the relationship between the employer and employee, outlining each party’s duties, responsibilities, and rights.

Typical standard clauses in an employment contract are:

  • The job description.
  • The duration of the employment.
  • Details about compensation and benefits.
  • Confidentiality agreements.
  • Mechanisms for dispute resolution.
  • Conditions for termination.
  • Clauses related to non-disclosure and non-competition.

Incorporating these standard clauses ensures both the employer and the employee gain an understanding of what each can expect from the other. This level of understanding is vital because it sets a clear path for both parties, defining their roles and expectations during the employment relationship.

These clauses also provide the basis for handling any potential disputes that may arise in the future. These clauses clarify what was initially agreed upon by the employer and employee.

Ensure  Employment Contracts are Clear and Specific

When drafting an employment agreement, it is crucial to prioritize clarity and specificity throughout the document. This means making sure that the terms, conditions, and clauses are written in a clear and precise manner.

Lack of clarity within the contract can lead to misunderstandings, incorrect interpretations, and potential legal disputes down the line. 

The following guidelines help to make a contract more clear: 

  • Use Clear and Accessible Language: Employers should use straightforward and easily understandable language that all parties involved can comprehend. 
  • Detailed Job Descriptions: Clearly outline the specific responsibilities and tasks associated with the job. This helps to prevent any potential disagreements or misunderstandings about the nature of the work expected from the employee.
  • Transparent Compensation and Benefits: Provide a comprehensive breakdown of the salary structure, payment frequency, and any additional benefits or perks offered to the employee. By clearly outlining these details, both parties have a better understanding of the financial aspects of the employment.
  • Explanation of Technical or Legal Terminology: If the contract includes any technical or legal terms, it is important to provide explanations alongside them. This ensures that all parties involved have a clear understanding of the meaning and implications of these terms.

By drafting the employment contract with precision and clarity, employers can minimize the risk of misunderstandings that can lead to dissatisfaction, or legal disputes. 

For employers, it is best to consult with an experienced employment lawyer to draft the employment contract.

An employment lawyer can also review the contract and advise the employee before they sign. 

Compliance with the Employment Standards Act

In Ontario, it is mandatory for all employment contracts to comply with the ESA. The ESA sets out the minimum standards for most employees working in the province, including regulations on working hours, minimum wage, vacation and holiday pay, and employment termination.

It is important to note that the ESA standards represent the minimum legal requirements that cannot be bypassed or contracted out of, even with the employee’s consent. Any provision in the contract that provides less than the minimum ESA standards is deemed void. An employment contract can provide an employee with more than their minimums under the ESA.

Non-compliance with the ESA can expose employers to consequences including fines, penalties, and potential lawsuits brought by employees. Employees may also complain to the Ontario Ministry of Labour regarding an employer’s ESA violations. Therefore, ensuring the employment contract aligns with the ESA is a legal obligation. By adhering to the ESA minimum standards, employers can try to mitigate their legal risks.

It is always a good idea to seek legal advice from an experienced employment lawyer to ensure your employment agreement is up to standards and to mitigate any issues arising in relation to the contract.


Drafting employment contracts in Ontario requires a detailed approach to ensure legal compliance and establish clear expectations between employers and employees. 

By including standard clauses, employers can provide a transparent framework that outlines duties, responsibilities, and rights for both parties.

Emphasizing clarity and specificity in the contract is crucial to avoid misunderstandings and limit exposure to potential legal disputes. Using straightforward language, providing detailed job descriptions, clearly outlining compensation and benefits, and explaining technical terms all help to ensure a mutual understanding of the contract’s terms.

Employers are obligated to comply with the ESA. Employers must adhere to the minimum standards for working conditions, wages, and termination. By aligning employment clauses and agreements with the ESA, employers can try to mitigate their risk of penalties or lawsuits.

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If you are an employer or employee and have any questions regarding employment contracts and agreements, our team of experienced lawyers at Achkar Law can help.

Contact us today at +1 (800) 771-7882 or email [email protected], and let us help you find the solutions you need to move forward.