Is It Time to Review My Employment Contract?
If you have entered the workforce in your teenage years or after graduating College or University, you might have encountered an Employment contract with multiple pages of clauses and legal terms beyond your comprehension. And, just as most people usually do, you might have browsed through it, read the salary terms and vacation leave provisions and called it a day. To top it all off, it does not help that a human resource employee is right in front of you explaining the gist of your contract, while at the same time expecting you to read and sign within the day. This is when employment law can take advantage of the uneducated, and cause problems for an employee down the road.
We have all been in that situation, but the general consensus is at the end of the day everyone just needs that job to make ends meet and most people deal with the legality only when a situation arises. It is our current reality that most employees read the terms of their contract only when faced with an issue after they are already terminated. They often only question it when severance pay and contract enforceability were brought into the forefront.
But Why Should I Care Now?
Last year, the Ontario Court of Appeal released a surprising decision that potentially invalidates termination clauses on numerous employment contracts within Ontario.
This recent development was brought about by Waksdale v. Swegon North America Inc., 2020 ONCA 391, when the judge at the Court of Appeal favored the employee citing that a contract should be read as a whole and not per clause, and that your employment contract will be deemed unenforceable if any wording of the termination provisions contravene any facet of the ESA and its regulations.
What’s in It for Me?
The general essence of Employment Law first and foremost is to safeguard the rights of an employee (because generally speaking employers have greater bargaining power). Through this recent development, the court decision further enhances that purpose to which this law is initially made.
Most employers in Ontario have iron-clad and expertly drafted “without cause” provisions on their contracts which protects them from wrongful dismissal claims. At the same time, however, most of them also have a “termination for just cause” clause that permits employees to be terminated without pay-in-lieu of notice that violates the minimum standards that the ESA is trying to uphold.
Prior to this ruling, the common law that the courts follow is that if the employee is terminated with or without cause, and the provisions in the contract for which he/she was terminated follows that of the ESA then the contract wins and it will be in favor of the employer. For this situation before, it does not matter if the other provision discredits/refutes the ESA, just as long as the clause in question for your termination follows that of the ESA regulation.
Due to this recent development, numerous companies across Ontario have now had to review and change the wording of their termination clauses if they want it to be binding if tried in court. Because of Waksdale v. Swegon North America Inc., 2020 ONCA 391 employment contracts are being read as a whole and not per clause, and if one provision contravenes the ESA the contract will be deemed unenforceable, and companies might have to deal with wrongful dismissal claims that would cost them exponentially more money than before.
Where Do I Start?
Now that the importance of employment contracts has been specified, it is time for you to read your own contracts and protect your rights too. You might ask before anything else, “where should I begin”? Being curious is important and asking questions is a good way to start. In this day and age where job security is vital and employment is a constant need for everyone, reading that contract and asking questions will save you in the long run.
Here are some questions to ask:
- Does my employment contract favor me or does it favor my employer?
- Is it fair? Is it enforceable?
- Does it follow the standards set upon by the Employment Standards Act, 2000, SO 2000, c 41 in terms of benefits, vacations, other perks and opportunities, termination clauses, restrictive covenants, etc.?
- If I see a provision that I felt uncomfortable signing, can I have it changed?
- Can I bring the contract home and read it before I sign it?
For those who are already employed, your company might be in the process of drafting new and improved contracts due to this recent decision of the Court of Appeals. If this is the case, do your due diligence this time around, read that contract, ask questions, and do yourself a favor by understanding the terms of your employment.
In all the employment contracts there must be a consideration, to elaborate that a bit more there must be some kind of payment or bonuses, one time signing remuneration, raise of wages, or some other benefit that would put the employee in a better situation than before. It is very well worth it to have your Employment contract reviewed by a professional who understands the Employment Contract and advises you properly. Oracle Legal Services has helped hundreds of employees with their Employment Contract and is well versed in Toronto Employment Law such as Wrongful Dismissal, Constructive Dismissal and has recovered hundreds of thousands of dollars for them. To find out more about how we can protect your rights in a professional manner, be sure to call us at 647-872-3484 today.