Is Your Employer Forcing you to Sign a New Employment Agreement?
Imagine this: you’re happily chugging away at your desk, when all of a sudden your boss slides a glossy new employment contract across your table, asking that you “take this home and get it back to me when you’re ready”. Do you have to say “yes, sure I will sign it? More important, can you object to signing it and tell your boss you will refuse to change your existing employment contract? In this blog, we delve into the world of Ontario employment law and crack open the legality of forced contracts.
One of the most exciting things that can ever happen to someone is to receive a job offer (or a “dream job”). Oftentimes, when someone receives a job offer, they can get lost in all the excitement and sign the employment contract without carefully going reviewing it with an employment lawyer. In those cases, signing an employment contract without proper review can lead to severe legal implications either now or in the future.
So, in this article, we will look at some of the reasons why seeking legal expertise before signing a new employment contract can provide you with much-needed peace of mind and protect your interests as an employee (especially when it comes time for severance package during a wrongful dismissal).
Well, what exactly is an Employment Contract and what is it for?
An employment contract is a legally binding agreement between an employer and employee that outlines the terms, conditions and requirements underpinning the employment relationship. If, for whatever reason, either party fails to adhere to the terms, it could lead to legal consequences.
Employment contracts cover various terms and conditions that define the working relationship between an employer and an employee. Some of the key elements often include:
- Parties Involved: This part of the employment contract describes the names of the employer and employee.
- Job Title and Description: this part carefully describes the role and responsibilities of the employee.
- Termination of Employment: this section will describe how and when an employer can terminate the employee’s job, including for cause or without cause, and how much the employer must provide to the employee in a financial severance package.
- Start Date and Duration: This section specifies when the employment begins and whether it is a permanent, temporary, or fixed-term contract.
- Work Hours: Since companies tend to schedule their working hours differently, an employment contract will also outline the expected work hours, days of the week, and any flexible arrangements.
- Compensation and Benefits: A typical employment contract outlines an employee’s salary, bonus, health benefits, pension benefits, and so on.
- Termination Clause: An employment contract also showcases the conditions under which either party can terminate the contract, including notice periods.
- Confidentiality Clause: requires an employee to hold all confidential information in trust and strict confidence and agree that it shall be used only for the purposes required to fulfill employment obligations, and shall not be used for any other purpose, or disclosed to any third party.
- Dispute Resolution Clause: generally attempts to prevent an employee from bringing a civil claim under the employment contract but does not prevent the employee from participating in a mandatory statutory dispute resolution mechanism, such as a minimum standards complaint.
Contrary to some misconceptions, employers in Ontario cannot legally force you to sign a new employment contract. In fact, you have the freedom to choose whether to accept the terms in a new employment contract, or stick with the old ones in your previous employment contract (or better yet, protect yourself with common law employment rights without a written employment contract at all).
Why Should You Have Your Employment Contract Reviewed by a Lawyer?
As an employee, before signing an employment contract, it is wise to consult a top Ontario employment lawyer to help you review and understand its terms and conditions.
- The reality is that employment law is a very complex of law, varies across different jurisdictions hence, and always changing. This is the key reason why it is important to consult with an employment lawyer – in addition to helping protect your legal rights and interests by negotiating what goes into the employment contract.
- Apart from helping you understand its terms and conditions, a Toronto employment lawyer can also help you negotiate better or more favourable terms, as most employment contracts are usually drafted to favour the company (not the employee).
The Requirement of “Fresh Consideration” for New Employment Contracts
Under contact law, an employer must provide a financial incentive to have an employee sign a new employment contract if they are already working or have not previously signed any employment contract. Oftentimes, this can include signing bonus or a salary or wage increase, additional health or pension benefits, bonus or commission raise. Remember, though, by accepting these new “perks” when signing a new employment contract, will usually mean you are legally bound by its terms, conditions and requirements. So, it is always important for an employee to weigh the pros and cons carefully before deciding to accept by signing on the dotted line.
If you are an employee who believes you have a good reason to resign from your job but want to ensure a smooth and proper transition to avoid a wrongful resignation claim from your employer due to workplace harassment or hostility, or if you are an employer who believes your employee abruptly left in a wrongful resignation, or are experiencing other workplace, or about any other common workplace issues, please call an experienced Ontario employment lawyer to discuss your options and next steps on how to deal with a wrongful dismissal. As an employment law firm in Toronto, Bune Law has reviewed and negotiated improvements to many severance packages. You will review and get guidance on your severance package before you agree to sign any termination documents, and help ensure that your severance package is fair and reasonable.