An Employment Agreement in Ontario: 3 Things Employees Should Knowachkarlaw-admin
When an employer provides you with a written employment agreement to sign in Ontario, it’s crucial to read it carefully to understand your risks and ensure that it’s fair and reasonable. Employees should not sign an employment contract without fully understanding its terms and conditions, as these will affect their legal rights and obligations at work.
This article will explain 3 essential things employees should look for in their employment contracts in Ontario. You will also learn how a lawyer can help you understand and seek your legal entitlements.
Termination Clause and Related Provisions
One of the most important clauses in an employment contract is the termination clause. This clause outlines the conditions under which an employer can terminate an employee’s employment, and what compensation the employee will receive if they are terminated.
In Ontario, the Employment Standards Act, 2000 (“ESA”) outlines the minimum requirements for termination entitlements. However, an employment contract can provide more generous termination pay than what is outlined in the ESA. For example, an employment contract can provide the employee with notice or pay in lieu of notice that exceeds the ESA minimums.
If the termination clause in your employment agreement is not enforceable or there is no termination clause at all, you may be entitled to common law reasonable notice. This amount includes your minimum legal entitlements under the ESA, but can be higher than 24 months’ of pay in total depending on your unique circumstances.
An employee should also review what happens to other forms of compensation upon termination. For example, bonus, commission, and share compensation provisions may be phrased to deny you such compensation upon termination – even if you otherwise would have received that additional compensation in the next week!
If the termination clause and related provisions are unfair, you may want to negotiate with your employer, and seek legal advice from an experienced employment lawyer. It is also helpful to speak with an experienced employment lawyer if you are terminated and want to understand your entitlements.
Non-Competition and Non-Solicitation Clauses
Non-competition and non-solicitation clauses are also known as restrictive covenants. They are included in written employment agreements to prevent an employee from competing with or otherwise harming an employer’s business after the agreement ends.
Non-competition clauses do not allow employees to compete with their former employer’s business within a certain timeframe and geographic area. In Ontario, Non-competition clauses in employment agreements entered into after October 25, 2021 are not enforceable against most employees under the ESA.
Non-solicitation clauses prevent current and former employees from “poaching” clients, suppliers, and other employees from an employer within a certain timeframe and geographic area. These are not prohibited by the ESA at all.
Whether a non-competition or non-solicit clause is ultimately enforceable against an employee will depend on a variety of contextual factors. The most common are the duration of the clauses and their geographic scope. Generally speaking, the longer the duration and wider the geographic scope, the less likely an employer can enforce them against an employee.
An employer can bring a civil action through the Ontario Superior Court of Justice to seek damages and remedies for breach of a restrictive covenant. However, an employee can defend against the allegations by arguing the duration and geographic scope of the restrictive covenants are unreasonable.
These clauses can limit an employee’s career mobility and earning potential, so it’s essential to carefully review them before signing an employment agreement. If you are uncertain about the enforceability or reasonableness of these clauses, you may want to seek legal advice before signing anything.
Benefits and Other Compensation Clauses
Another critical aspect of an employment contract is the benefits and compensation package. Employees should ensure that their employment agreement accurately reflects their agreed-upon salary, bonuses, vacation time, sick days, and other benefits.
Employment contracts can also include clauses that change an employee’s compensation or benefits over time. For example, an employment contract might state that an employee’s compensation will be reviewed annually and that the employer has the right to make changes to the compensation package.
It’s important to understand these clauses, as they can have a significant impact on an employee’s financial security and quality of life.
How An Employment Lawyer Can Help
An experienced employment lawyer can help ensure that an employment contract is fair and reasonable. They can help you understand the legal implications of the clauses in the contract and negotiate with your employer for more favorable terms.
If you already have an employment contract, an employment lawyer can review it and advise you on your legal rights and options. If you have been terminated from your job, an employment lawyer can help you understand your legal entitlements to notice or pay in lieu of notice.
An employment lawyer can also advise you on whether you have a potential legal claim against your employer, such as the following:
- Wrongful or constructive dismissal;
- Violations of workplace legislation, such as the ESA and the Occupational Health and Safety Act (“OHSA”);
- Violations of the Ontario Human Rights Code; and
- Damages for other civil claims, such as intentional infliction of mental distress and bad-faith behavior from your employer in the manner of your dismissal.
An employment agreement is a binding contract that outlines the terms and conditions of your employment. It is crucial for employees to be aware of the potential risks associated with an employment agreement before they sign.
The 3 important parts of an employment agreement an employee should pay careful attention to are:
- Termination Clauses and Related Provisions;
- Non-Competition and Non-Solicit Clauses; and
- Benefits and Other Compensation Clauses.
Employees should try negotiating with their employer if any provisions are too restrictive or otherwise unfair. It is always best to consult with an experienced employment lawyer to understand your legal rights and obligations in an employment agreement before you sign. An employment lawyer can also help you determine your entitlements pursuant to an employment contract if you are terminated.
Contact Achkar Law
If you are an employer or an employee with questions about an employment agreement or needing assistance at any stage of a workplace dispute, our team of experienced employment lawyers at Achkar Law can help. Contact us by phone toll-free at 1 (800) 771-7882 or email us at [email protected], and we will be happy to assist.