You have been offered a new job. You are excited about it. The offer letter seems fair and you are eager to start the position. Why should you pay a lawyer to look over this employment contract?
Fast forward ten years. Your company is going through restructuring and you are now out of work. What that document said ten years earlier can dramatically affect your rights and entitlements when your employment ends.
Assessing an Employment Contract
The language of employment contracts is often technical and legal. It may sound fair and reasonable, but it may not be.
We often see employment contracts that state something like: “Should your employment be terminated by the company without cause, you will be provided notice, or pay in lieu of notice, in accordance with the Employment Standards Act.” That sounds fair, right? The company is setting out that it will follow the law if it terminates you.
The problem is that this type of termination clause significantly limits an employee’s rights at termination.
In the scenario above, an employee who had a clause like this and had worked for the company for 10 years would be entitled to eight weeks’ notice of termination under the Employment Standards Act with an additional 10 weeks’ severance pay if the employer has a payroll of at least $2.5 million or more. If that clause was not in the employment contract, the employee would generally be entitled to between nine and 12 months’ reasonable notice of termination, or pay instead of this notice. If the employee was earning $52,000 a year, the difference in termination pay could be as much as $44,000.
This is only one example of the types of clauses found in an employment contract which appear reasonable but may dramatically affect your rights.
It usually takes one of our lawyers about an hour to review an employment contract and provide you with our comments. This investment can result in changes to the initial offer letter that benefit you.
If you are already working, or have been terminated, you can review our other blogs on wrongful dismissal and your other employment rights here.
If you have been asked to sign an employment contract, and you want to speak with an employment lawyer with experience in this area, contact us at [email protected] or 1-888-640-1728 (toll free) or 647-204-8107 (within the GTA).
Are clauses that purport to waive an employee’s years of service for the purposes of severance/notice pay enforceable? It’s all important when your company is sold. Here is what to look for.read more
As we have written before, an employer may generally terminate an employee for any good business reason, as long as it provides the employee with adequate notice of termination (or pay in lieu of notice). Failure to provide adequate notice results in a wrongful...read more
If you have lost your job and need temporary income support, do you know what to do? In Canada, you can apply for Employment Insurance (“EI”) for partial income replacement from the Federal government. To learn about the different types of EI and whether you would be...read more