Employment Contract Review: Why It Is Essential

by | Feb 18, 2021 | For Employees

You have been offered an exciting new job opportunity and your future employer has asked you to sign an employment contract. Why should you hire a lawyer to do an employment contract review?

The language used in most employment contracts takes away your legal rights. A lawyer can explain which rights you are giving up in an employment contract and can suggest changes to the contract that benefit you.

An employment contract review by a lawyer can highlight some of the frequently used clauses that could cause you significant problems down the road. These are some examples:

Termination Clause

Most employment contracts contain a termination clause which takes away your right to reasonable notice of termination. This will result in you receiving much less termination pay than you would otherwise receive.

Let’s say you earn $ 52,000 a year and you are terminated after 12 years of service. Through your employment contract, a small employer can limit your rights on termination to 8 weeks’ pay (or $8,000) with a properly drafted termination clause whereas without this clause you could be entitled to up to 12 months pay or more ($52,000+).

Read here for more information about how an employment contract review can increase your post termination pay.

Bonuses and Options

Sometimes a job offer is lucrative because of the additional compensation above the base salary. Many employers use the employment contract to try to limit whether they have to give the employee any bonus. They also use the employment contract to try and prevent them having to pay a bonus or continue to provide options to the employee after she has resigned or been given notice. For example, the contract may state that the bonus is at the sole discretion of the employer instead of being based on performance targets and metrics. If the employment contract states that bonuses are only payable when the employee is “actively employed” this could mean that you give notice of termination and are owed a bonus after that date, but the employer will not pay it.

Full-time and Attention

This kind of clause provides that you must devote your full-time and attention to the employer. Many employees have commitments or interests outside of work that may result in a violation of this kind of term of employment. If so, you may want to suggest an amendment to this clause which permits you to continue a specified outside interest.

An employment contract review can help you understand these clauses and give you strategies to negotiate to change them before you start a position.

Spending time with an employment lawyer reviewing each term of an offer of employment will ensure that you know the legal implications of each clause in the contract and may lead to changes to the offer that benefit you.

If you would like to do an employment contract review with our Barrie and Toronto Employment Lawyers at MacLeod Law Firm you can contact us via [email protected] or 647-204-8107. 

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The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

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