Contra Proferentem in Employment Contracts
Ambiguity in employment contracts often leads to disputes. When a contract term is unclear, Canadian courts apply the doctrine of contra proferentem, meaning the ambiguity is usually resolved against the party who drafted the agreement. Since employers typically prepare employment contracts, unclear wording often works in favour of employees.
This article explains how contra proferentem works in Ontario and British Columbia, highlighting the similarities, differences, and what employers in both provinces need to know.
What is Contra Proferentem?
Contra proferentem is a legal principle used to interpret ambiguous contract terms. If the wording is unclear, the clause is construed against the party who drafted it.
In employment law, this matters because:
- Contracts are usually drafted by the employer;
- Courts recognize the imbalance of bargaining power between employer and employee; and
- Ambiguities often arise in termination clauses, bonus entitlements, restrictive covenants, and benefit provisions.
Application in Ontario
Ontario courts apply contra proferentem consistently, especially when contract language conflicts with statutory minimum standards under the Employment Standards Act, 2000 (ESA).
- Termination clauses: If wording is ambiguous about notice or severance, courts will interpret the clause to provide the employee with greater protection.
- Restrictive covenants: Ontario’s Working for Workers Act, 2021 bans most non-compete clauses, making ambiguity even riskier for employers.
- Case law: Ontario courts frequently strike down vague or unclear termination provisions, defaulting to common law reasonable notice.
Application in British Columbia
In British Columbia, the principle is also firmly recognized by courts. Ambiguous employment contract terms are read in favour of employees, particularly where minimum standards under the BC Employment Standards Act are at play.
- Termination provisions: Ambiguity or inconsistency with the BC ESA will generally render a clause unenforceable, leaving the employer exposed to common law notice obligations.
- Restrictive covenants: BC courts already apply strict scrutiny. If a non-compete or non-solicit clause is vague in time, geography, or scope, it is highly unlikely to be enforced.
- Case law: BC courts often emphasize fairness and clarity in employment agreements, especially for standard-form contracts.
Ontario vs. BC: Key Similarities and Differences
| Issue | Ontario | British Columbia |
|---|---|---|
| Statutory minima | ESA governs minimum standards; ambiguous clauses that attempt to undercut the ESA are struck down. | BC ESA sets minimum standards; ambiguous clauses inconsistent with the Act are unenforceable. |
| Non-compete clauses | Banned in most cases since 2021, except for executives and business sales. | Not banned, but heavily scrutinized; vague restrictions rarely enforced. |
| Termination clauses | Courts frequently invalidate clauses for ambiguity; default to common law notice. | Courts also favour employees if termination provisions are vague or inconsistent. |
| Judicial approach | Strong emphasis on employee protection and statutory compliance. | Similar emphasis, but with case-by-case flexibility; WorkSafeBC standards may also influence fairness. |
Best Practices for Employers in Ontario and BC
Use clear, precise language in all contracts. Avoid legalese and inconsistent terminology.
Ensure compliance with provincial standards (Ontario ESA or BC ESA). Contracts cannot undercut minimum entitlements.
Review restrictive covenants: In Ontario, non-competes are almost always unenforceable; in BC, they must be narrowly tailored.
Update template agreements if your organization operates in multiple provinces. Draft contracts to satisfy the stricter of the two jurisdictions where possible.
Seek legal review of contracts before implementation to minimize the risk of unenforceability.
Conclusion
Contra proferentem highlights the risks of ambiguous contract drafting. In both Ontario and British Columbia, unclear employment contract provisions are interpreted against employers. Termination clauses, non-competes, and benefits provisions require particular care.
At Achkar Law, we assist employers in Ontario and British Columbia with drafting, reviewing, and enforcing employment contracts.
Clear agreements protect your business, reduce disputes, and ensure compliance with local laws.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©