It’s always an exciting time being offered a new job opportunity – a new role, a fresh start and – most importantly – more pay, perks and benefits. But with that new gig may also come a request from your new employer that you sign a new “employment contract,” before you begin your first day on the job.
You may wonder why you even need to sign a new employment contract – is not your acceptance to begin your new job on Monday enough to form a “contract” with your new boss? In fact, many of us rarely even think twice before signing a new employment contract. Often, at the very most, we may simply glance over the paper and, fearful of losing the job opportunity, sign our name on the signature line.
Oftentimes, employees will quickly sign an employment contract before getting all the details and understanding its contract. But before you sign away on the dotted line, it is important to first understand your contractual rights and responsibilities – even if you intended on accepting the job anyway. It may be helpful to know about some of the most common terms found on an employment contract. Below is a brief explanation of some of the most important contractual clauses you should seek legal advice from an employment lawyer about your role.
Probation Period
This section of an employment contract refers to the period of time during which your new employer can terminate (end) your employment, without providing you any prior notice or severance pay. Usually, employers will ask for a minimum of 3 months’ probationary period, which is the length of time an employee in Ontario must work before they are protected by the minimum standards under the Employment Standards Act, 2000. If the probation clause is longer than 3 months, or if it allows your employer to extend it even further than 3 months, it may be unlawful (and at the very least, employees in such cases are generally entitled to minimum notice of termination).
Remuneration
What are you being paid in exchange for providing your knowledge, skills and services to your new employer? Will you be receiving only base salary, or a combination of salary and bonus? And what are the conditions for receiving bonus pay, especially upon termination of employment? Will you also receive health benefits, such as dental and medical insurance? How about the company’s pension plan – is it a defined contribution pension plan, or a defined benefits pension plan (what’s the difference, anyway?). These are all some of the important issues to review and discuss with an employment lawyer about your new employment contract?
Termination
This is, by far, the most contentious and impactful sections of any employment agreement. As such, it is critical to pay special attention to what it says about terminating your employment “for cause” or “without cause.” Does the contract say your entitlements upon termination are limited to those minimums required under the Employment Standards Act, 2000? Has the employer not included any termination clause and, in that case, what is the impact on your legal rights as an employee? Similarly, understand the amount of resignation you are required to provide before leaving your new for a new one in the future. You may not (want to) think about these issues at the start of a new job, but preparing yourself from the outset is better in ensuring you position yourself for, among other things, a maximum severance package if your employment is terminated.
Workplace Policies
This section of an employment contract typically incorporates your employer’s various rules, policies and procedures that govern all employees. This includes, for example, workplace harassment policies, bonus policy, human rights and accommodations, vacation policies and sick leave policies. Therefore, if they are incorporated into your employment contract, you are expected to comply with them. It is prudent to request a copy of these workplace policies to review and understand prior to signing the contract. Among other things, it can help being criticized for not following policies you may never have seen – or, more importantly, reduce the risk of being disciplined (or terminated) for not following the company’s requirements and policies.
Non-Competition and Non-Solicitation
In some particular industries, employers ask employees to sign a non-competition or a non-solicitation clause. As the names suggest, these are intended to restrict an employee’s ability to compete with or solicit the customers and/or employees of the company after their employment ends (this is why they are also called “restrictive covenants”). As such, they are particularly important since they may limit an employee’s ability to find new employment after termination. Whether or not a non-compete agreement or non-solicitation agreement is enforceable and binding will depend on the specific wording. To get a better sense of its potential impact on your activities post-termination, it is important to speak with an employment lawyer before signing a new employment contract requiring you to agree to such terms.
Contact Bune Law, Employment Lawyer in Toronto
Not all employment contracts are alike or created equally. An employment contract could be one of the most important documents that you sign in a decade.
This is why it is very important for employees to have an employment lawyer examine their employment contract so that, at the very least, they know what they are getting themselves into.
At Bune Law, our employment lawyer can help you understand your particular contractual rights and obligations. Let us review your employment contract, negotiate with your employer and, if necessary, guide you in any discussions with your employer. Contact Bune Law online or at 647-822-5492 for a consultation.
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