Employment Agreements
It never ceases to amaze me how people will enter into legal agreements with a new employer and never have their employment agreements reviewed by a lawyer first.
Would you buy a house without carefully reviewing the contract? Or buy a car without knowing it is has all the features you want? So, why would you enter into a legal relationship with a new employer and not fully understand everyone’s rights and obligations? Perhaps people are so excited about possibly getting a new job that they don’t want to make any waves or ask any questions, lest they appear too demanding. Or perhaps they feel they don’t have the upper hand.
The courts repeatedly state that employees are never on a level playing field either before, during or after employment. I agree with this sentiment having done as much Employment Law as I have. So, perhaps it would be helpful to review some of the so-called “standard” clauses in an employment offer or offer letter that you might see one day but don’t bother to get checked by a lawyer.
“Your employment is subject to a probation period of three months”. Now, what does this mean? In a word, nothing.
There is no longer such a thing as an implied probation period at common law. Unless the document clearly sets out that during the probation period the employer can terminate and your employment without notice or pay in lieu of notice, this phrase will mean nothing.
“We can terminate your employment without just cause by providing you with your statutory entitlements”. When you read this clause, you really need to ask three questions. 1) What does “without just cause” mean? 2) What are my “statutory entitlements”? 3) Does this clause mean that I won’t be provided with any other type of severance pay other than statutory entitlements? Let’s look at question number 2. Statutory entitlements mean the minimum entitlements as provided for by the Employment Standards Act in Ontario (assuming your employment is in Ontario). There are two sections of that Act that may apply to you. One section states that you will be entitled to one week for every year of service to a maximum of eight weeks upon the without just cause termination of your employment. Another section says basically the same thing but has a maximum of twenty-six weeks provided the company has an annual payroll in excess of $2.5m and you are employed at the company for at least five years. Question 3 is really the crux here. If you see this clause, you need to clarify if ALL you will get upon termination without just cause is statutory entitlements. In my view, this clause is deficient for its lack of clarity, but I have never tested this view at trial. Better to know what the employer means by this, than not know.
I have touched upon only two common clauses one sees in an employment agreement. Do yourself a favour. If you are presented with an offer letter or employment agreement, take it to an employment lawyer to have it reviewed. Even if you have no intentions of trying to change it, you should still know what it says.
