Recession Hasn’t Stopped Employers From Hiring

Recession Hasn’t Stopped Employers From Hiring

The looming recession and the recent spate of layoffs have amplified employees’ fears over job security. Job seekers are equally worried about their prospects of getting hired. However, most Canadian employers continue to hire new workers despite the economic downturn. Whether you are in the process of getting hired or fear a job loss due to the recession, it is crucial to review your employment contract. This article will explain how an employment lawyer can help ensure your employment contract complies with the Ontario Employment Standards Act, 2000 (ESA).


What are the Important Terms of an Employment Contract?

An employment contract is an agreement that outlines the terms of an employment relationship. Every employment contract contains terms related to an employee’s job, such as their position, duties, hours of work, vacation pay, and workplace policies.

Both employers and employees are bound by the terms of an employment agreement and can sue for a breach of its terms. Some important terms contained in employment contracts in Ontario are:

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Compensation Clause 

Every employment contract must contain a compensation clause. Compensation is the wage or salary an employee receives in exchange for work they perform for the employer. A compensation clause usually mentions the amount, type, mode, and frequency of payment. Employers in Ontario must pay their employees at least the minimum wage given in the ESA, with limited exceptions.


Termination Clause

A termination clause outlines an employee’s severance entitlements upon termination, with or without cause. A properly drafted termination clause can limit a dismissed employee’s entitlement to notice or pay in lieu of notice to the statutory minimum under the ESA.


Probation Clause

Many employment contracts also contain a probation clause. It mentions the time frame where an employer may determine an employee’s suitability for a particular role. In Ontario, most employers choose a probation period between three to six months. If an employer finds an employee unsuitable for the role, they may terminate the employee within the probation period without paying them severance.


Non-Solicit and Non-Compete Clause

A non-solicit clause prevents an employee from soliciting the employer’s customers, vendors, and employees during and after the employment relationship’s termination.

A non-compete prevents an employee from competing with the employer’s business during and after the termination of employment.


What Happens When an Employment Contract Violates the ESA?

Most employees in Ontario are guaranteed certain statutory rights and protections under the ESA. The ESA sets the minimum standards an employer must comply with while drafting employment contracts.

Further, the ESA prohibits anyone from contracting out of it. This means an employee cannot waive the protections guaranteed under the ESA by signing an employment contract containing terms that do not comply with the ESA.

Employers are forbidden from putting any terms in the employment agreement that deny an employee a minimum benefit, right or protection guaranteed by the ESA. However, an employer may grant an employee greater protections, rights, and benefits than the ESA minimums.

For instance, the term in the employment agreement stating that an employee is to receive less than minimum wage breaches the ESA and therefore, is unenforceable.

Employees can complain to the Ontario Ministry of Labour if their employer fails to comply with the ESA. If the Ministry concludes that the employer violated the ESA, it may impose fines and penalties upon the employer in addition to ordering payment of unpaid wages.

Further, a term that attempts to contract out of the ESA is legally unenforceable. An employer may not rely on such a term to protect its interests if an employment dispute proceeds to litigation.

A typical example is termination clauses. Most employers attempt to restrict the employees’ severance entitlements upon termination to the ESA minimums. However, if a termination clause attempts to contract out of the ESA, it could be unenforceable.

An employee terminated under an unenforceable termination clause is entitled to common law reasonable notice or pay in lieu, which can be as high as twenty-four months of salary!

If you suspect the employment contract or any of its terms breaches the ESA, you may contact an employment lawyer to review the agreement.


How an Employment Lawyer Can Help Review Your Employment Contract

Employees commencing a working relationship with their future employer should review their employment contract before signing. An employment lawyer can help determine if your employment contract complies with the ESA.

An employment lawyer will thoroughly examine your employment contract to protect your rights, benefits, finances, perks, exit from the company, and future opportunities.

The employment lawyer will use their knowledge of employment law to clarify the exact terms for bonuses, commissions, benefits, and perks. They will try to protect your access to the common law. Further, an employment lawyer can remove the ambiguous language in the employment contract, which can lead to disputes in future.

An employment lawyer can help you understand your role, responsibilities, and employment terms. They can explain the legal consequences of breaching various employment conditions. They can use their legal knowledge and advocacy skills to help you negotiate better terms of employment.



The rising inflation and interest rates and falling stock markets and real estate prices are the telltale signs of recession. Both job seekers and current employees are worried about their future due to the recent spate of layoffs.

Despite the looming recession, most employers across Canada continue to hire new workers. Every recruit should try to understand the implications of their employment contract terms before signing anything. Further, every current employee should review their employment contract to determine their rights and obligations.

An employment lawyer can help determine whether your employment contract complies with the ESA. They will explain all the important terms and help you understand their legal implications. They can negotiate with your employer to ensure your employment contract is unambiguous.


Contact Us

If you are an employee who needs to get your employment contract reviewed, 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 would be happy to assist.


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