Drafting Your Own Employment Agreement: What Next?

An employment agreement is a formal document that employers typically create and give to their employees before they start working. Sometimes, though it’s not common and might not be the best idea, an employer might ask you to write your own employment agreement. If you find yourself in this situation, it can be confusing and daunting because of all the legal language involved. In this article, we’ll simplify things by explaining some key points you should consider when creating your own employment contract.

What Is an Employment Agreement?

An employment agreement, often referred to as an employment contract, is a legally binding document that outlines the terms and conditions of employment between an employer and an employee. It serves as a written agreement that specifies important details of the working relationship, such as job responsibilities, compensation, working hours, benefits, and other relevant terms and expectations. This document is a crucial tool for both parties to ensure mutual understanding and compliance with the agreed-upon terms during the course of employment.

Why Is an Employment Agreement Important?

The significance of an employment agreement lies in the security and safeguard it provides to both parties involved. An employment agreement serves as a written record that holds both the employer and employee responsible for the commitments they’ve agreed upon. Therefore, it’s crucial for everyone to have a clear understanding of what they’re agreeing to when they sign this document.

When an employee is asked to create their own employment agreement, it’s a unique chance to structure the working relationship to their advantage. Just like employers, employees must follow certain rules, mainly those outlined in the Employment Standards Act (ESA), which sets minimum standards. As long as the agreement respects these standards and doesn’t try to avoid them, it will be legally binding.

However, keep in mind that what the employee initially drafts may not be the final version. Employers often have questions or may propose changes to specific terms. While the law generally leans in favor of employers, an employment agreement created by an employee is unlikely to be considered unconscionable by a court. Nonetheless, it’s wise for the employee drafting the agreement to keep it fair and balanced, as one-sided terms can lead to resistance and strain the employer-employee relationship.

Key Provisions in an Employment Agreement

An employment agreement is a comprehensive document that can encompass various aspects of one’s employment. These provisions are crucial for defining the terms and conditions of the working relationship. Here are some key provisions that may be included in an employment agreement:

Positions, Duties, and Responsibilities: This section outlines the specific role and responsibilities the employee is expected to fulfill within the organization. It clarifies the scope of the job.

Place of Employment: It specifies the physical location where the employee is expected to work. This can include details about remote work, office locations, or travel requirements.

Date of Commencement: This provision indicates the date when the employment relationship officially begins, ensuring both parties are on the same timeline.

Term of Employment: This outlines whether the employment is for a fixed term, such as a one-year contract, or if it’s open-ended and will continue until one of the parties terminates it.

Compensation and Benefits: Details about the employee’s salary, bonuses, benefits, and any other forms of compensation are typically found in this section.

Hours of Work and Overtime: This part of the agreement addresses the standard working hours, overtime policies, and compensation for extra hours worked.

Non-Disclosure: An important provision, it emphasizes the confidentiality of company information and may include non-compete clauses to protect the company’s interests.

Termination: This clause outlines what an employee is entitled to in the event of termination. It comes into play when an employee is let go without a specific reason and is owed either a notice period or pay in lieu of notice. The termination clause is only bound by the minimum notice period required by the Employment Standards Act (ESA). However, an agreement that leans in favour of the employee may specify a termination entitlement that surpasses the ESA minimum and aligns more closely with common law reasonable notice periods.

Probationary Period: the probation clause is common in employment agreements. It limits an employee’s access to certain compensations and benefits until a probationary period ends. This can include an employee not being eligible for medical, dental, or other benefits during the probation period. However, employees can negotiate for a shorter probationary period or the complete removal of such a clause to better serve their interests.

Vacation Time: This provision specifies the employee’s entitlement to paid vacation, including the number of vacation days and related policies.

Non-Solicitation: This clause may restrict the employee from soliciting the company’s clients, customers, or other employees for a specified period after their employment ends. It aims to protect the company’s business relationships and trade secrets.

While employment agreements in Ontario must comply with the Employment Standards Act, 2000 (ESA), which sets minimum standards, parties have the flexibility to customize the agreement to better align with their unique needs and preferences. This customization allows for a more tailored employment relationship that benefits both parties.

What to Expect When Drafting Your Own Employment Agreement

The chance to draft your own employment agreement is not an everyday occurrence for employees. However, when this opportunity arises, it’s important to understand that the drafts you create are not set in stone until both you and your employer agree on the terms. Think of it as a collaborative process where your employer is open to negotiating the terms of your employment.

In such situations, it’s advisable to approach the drafting process with a fair and balanced perspective. Proposing one-sided agreements that heavily favour one party may lead to the rejection of the entire agreement. A more equitable approach is often met with a more positive response.

Whether you’re drafting an employment agreement or responding to one provided by your employer, seeking independent legal advice is always a wise step. Legal counsel can help you navigate the nuances of the agreement, ensuring that your rights and interests are protected throughout the process.

Contact Achkar Law

If you have any concerns or questions about your employment contract, our team of experienced employment lawyers at Achkar Law can provide valuable assistance. For employers, we can help you draft clear and comprehensive employment agreements that align with your business needs. For employees, we offer guidance in reviewing employment contracts to ensure that your rights and interests are protected throughout your employment.

Contact us by phone toll-free at 1 (800) 771-7882 or email us at [email protected], and we will be happy to assist.

Related Reading

• Employment Agreement Maintenance: Why It Matters and How To Do It
• A New Employment Contract: To Sign or Not To Sign?
• Contra Proferentem in Ontario – Ambiguity in Employment Contracts

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