Are you looking for information about an employment contract in Ontario? Maybe you are an emerging business that is planning to go on a hiring spree and about to welcome your first employees, or maybe things have gone wrong, and you need to cut ties with employees that just aren’t working out.

First things first, you should be in contact with an employment lawyer as soon as possible to handle any employment contract issues that may arise such as lawsuits, either as a plaintiff or a defendant.

Either way, we have experienced employment lawyers that can assist you with your employment law needs. Is your company facing a legal complaint for wrongful or constructive dismissal?

Or perhaps you have an employee or a group of workers that jumped ship, took a load of your firm’s confidential information on the way out and are now working for one of your competitors.

Speak With A Labour Lawyer

In any case, you have plenty of options when it comes to speaking with an employment lawyer. Thanks to ClearWay Law, you can call us or email us right now and our intake team will take your information and pass it on to a lawyer in Ontario who can assist you through the process.

As well, you can book a time directly below and the lawyer will be in touch. Or if you prefer, you can use the live chat function in the bottom right of the screen. ClearWay will do its best to connect you with an employment lawyer who will call you for a free phone consultation.

But before the lawsuits start flying and you gear up for a court battle, it’s vital to know your rights and obligations as an employer or an employee under an employment contract in Ontario.

What is the Employment Standards Act?

The Employment Standards Act is the piece of legislation that governs most employment relationships in Ontario.

While some industries are federally regulated in Canada, provincial employment legislation sets out the entitlements and rights of employees, while spelling out a host of obligations placed upon employers in the province. Employers and employees cannot opt out of the terms of the Employment Standards Act.

If there are terms in your standard employment agreements that conflict with the act, it’s more than likely that a court will find the contracts unconscionable and unenforceable, a frightening and avoidable prospect for anyone in business.

Essential Guide to Employment Contracts in Ontario

The last thing you want is for a judge to rule that the deals you make with employees aren’t worth the paper they’re printed on.

That’s why hiring an employment lawyer in Ontario is a crucial step in protecting your business from potential legal troubles on the horizon.

Making sure your employment contracts in Ontario are ironclad and unbreakable may save you from a lot of headaches (and a lot of money) should a contractual dispute arise and end up in a court of law.

The Human Rights Code

But the Employment Standards Act isn’t the only law that governs employment relationships in Ontario. For example, the Human Rights Code also addresses employment relationships in the province, aimed at preventing all manners of discrimination based on gender, sexuality, race, family status, religion, and disabilities.

The code provides human rights protections to employees who may be subject to bullying and harassment or have their careers stalled and stifled by discriminatory treatment by coworkers or management.

But employment contracts in Ontario and elsewhere in Canada have many facets, with a mix of different provisions governing the relationships between businesses and their employees. A strong employment contract should protect both parties from unfairness and misconduct.

For employers, though, it’s important to include clauses (e.g. non-compete or non-solicitation clauses) that will shield the company from unlawful competition from former employees who are given access to proprietary and/or confidential information.

How do non-solicitation clauses work?

Non-solicitation clauses are typically standard terms included in an employment contract. They prohibit employees from leaving their jobs and poaching or luring coworkers or clients and customers away from the employer. It’s a common scenario, perhaps more common than you might think.

More often than not, employment contract breaches involving non-solicitation clauses go something like this: a worker or group of workers resign from their jobs with minimal or no notice, taking company property or trade secrets out the door with them.

Soon after, you discover they’re working for a competitor or have started a company of their own, and suddenly clients and customers start walking away, telling you that they’ve found a new, better deal with another firm.

Ontario Employment Contracts: Know Your Rights

It doesn’t take strong business instincts to sense that something’s afoot; the timing of the two events shaking the foundation of your business simply can’t be coincidental. It dawns on you that you’ve been betrayed, and you need help.

Clients are dropping off like flies and going across the street as your once-trusted ex-employees undercut you using the knowledge and tricks of the trade they learned while working for you, and you need it to stop.

A strong non-solicitation clause applies both during the course of employment and after the employment relationship is over. But non-solicitation clauses are not always enforceable. They have to be unambiguous.

They must be reasonable in terms of the length of time imposed on an employee who can’t be unfairly restricted from seeking new employment once they’ve quit or been let go. Onerous and lengthy time-based limits that prevent workers from getting a new job might not hold up in court.

They also must be reasonable in terms of geographical scope. They are intended to protect an employer’s reasonable business interests but must be reasonably balanced with the rights of former employees.

What is the correct way to terminate an employee?

It is always best practice to consult an employment lawyer before terminating an employee. A good employment lawyer will help the employer understand its numerous legal obligations when terminating or laying off employees.

The advice employment lawyers in Ontario can provide will help you strategize and potentially save money on the termination, especially if you’re letting go of long-term or high-wage employees without cause.

It is important to terminate employees sensitively and professionally. Otherwise, there may be damages that flow from a harsh termination should a court find your company acted in bad faith.

Firing someone just before Christmas via text message after they’ve worked for your business for a decade is not a good look, but it’s not only the optics of such a move that are problematic.

Award of punitive damages

If a judge finds the actions of an employer to be malicious or high-handed, an award of punitive damages will add extra sting to an already painful situation for your firm’s bottom line.

Most employees will be entitled to notice of their impending termination or pay in lieu of notice. Those entitlements may be the minimums set out in the Employment Standards Act or maybe greater at common law.

The amount of severance an employee is entitled to varies depending on how long they’ve been with an employer. In other words, handing out pink slips and a few weeks’ pay to fired employees may not cut it should those former workers take your company to court.

Employment Contracts in Ontario

The length of the notice period will vary depending on many factors, such as whether there is a termination clause in an employment contract. It can also be about the age of the employee or the type of services provided.

In addition, it can involve the length of service and whether the employee held a management position. An employee may also be entitled to severance pay under the Employment Standards Act, which would be in addition to the termination pay.

An employer may wish to consider whether to obtain a full and final release. A release is an agreement for an employee to sign to prevent legal actions arising from their termination. A full and final release often involves an exchange for a severance package.

Just cause termination

However, an employee may be terminated for just cause and not entitled to severance pay should their firing arise from a breach of their employment contract or other misconduct.

Grounds for a just cause termination may include persistent absenteeism or lateness. Employers may also have cause to fire someone for insubordination, incompetence, or harassment in the workplace. Other reasons include theft and/or breaches of company policies.

Employees who are terminated for just cause are not entitled to notice or pay in lieu of notice. A lawyer can help determine whether there is any proper basis to terminate an employee for just cause.

Employment Contracts and Just Cause in Ontario

Employment lawyers specialize in the area of law that governs employment relationships, a practice shaped by decades of jurisprudence and legal precedents.

These lawyers provide advice and assist with all matters involving employers and employees, including:

Employment contracts
Employee terminations
Workplace Procedures and Policies
Harassment and Discrimination in the Workplace
Employee disciplinary matters.
Employment legislation
Workplace investigations
Human rights legislation

Demystifying Employment Contracts In Ontario

Employers should obviously view employment agreements as an extremely important tool and a necessary business expense for the protection strong contracts offer. It’s always recommended that employers obtain legal advice from an experienced and capable employment lawyer.

If your business is small and doesn’t have in-house counsel, hiring a lawyer to prepare employment agreements may present some eye-popping upfront costs, but springing for the best legal representation will likely pay off down the road.

Many employers and businesses do not realize that employment laws in Ontario are very generous to employees, which could be argued come at the expense of the employer.

A proper and carefully drafted employment agreement will give an employer peace of mind knowing their interests are protected in the event of a contractual dispute with an employee.

Employment Contract Ontario Termination Clauses

A properly drafted termination clause could significantly limit an employee’s entitlements in the event of their dismissal, such as notice or pay in lieu of notice. However, an employer cannot opt out of minimum entitlements prescribed by the Employment Standards Act, though it is possible to contract out of common law notice entitlements.

Severance entitlements, meanwhile, could be well more than one month’s salary per year of service. Termination clauses are also beneficial because they provide certainty to both employers and employees.

Restrictive Covenants in Ontario Employment Contracts

Most employees are not bound by restrictive covenants. A worker at MacDonald’s won’t be forced to sign an employment contract that prevents them from leaving their job and working at Wendy’s, for example.

But unless the employer included restrictive covenants such as non-compete and non-solicitation clauses in their agreements with the employee, workers could be free to walk out the door and join a competitor.

In other words, employment agreements allow employers to arrange and plan for different situations as their operations expand and evolve.

Non-solicitation clauses are vital to preventing the so-called “poaching” of employees and clients/customers. But to be enforceable, these clauses must be carefully drafted to ensure they are clear and unambiguous.

Similarly, non-compete clauses are usually unenforceable in Ontario, but depending on the circumstances, they may be both appropriate and enforceable.

This is why it’s important to speak to an experienced employment lawyer to get legal advice.

Nailing the Details: What to Know About

As the law currently stands, an employer is not permitted to legally lay off an employee without having the right to do so pursuant to an employment agreement. The COVID-19 pandemic certainly made it clear how this right can protect a business from significant losses during times of economic instability.

In light of COVID-19 and all the societal upheaval the virus has caused, it is more critical than ever for employees to understand their exposure and to take proper steps to protect their interests.

Conclusion On Employment Contracts In Ontario

ClearWay can connect you with lawyers who can help create employment contracts in Ontario. Once we have your information, you will get a call back from an Ontario lawyer who can provide advice on all matters related to employment law including:

Non-solicitation clauses.
Termination clauses.
Employment agreements.
Hours of work and days of rest.
Employment relationships.
Proper employee termination practices.
Restrictive covenants.
Non-competition clauses.

The importance of strong employment contracts to protect your business simply can’t be understated. Knowing that your interests are legally shielded from potential attacks no doubt provides peace of mind, the value of which is hard to peg. That’s where we come in.

If you need help with an employment agreement in Ontario, contact us.

Author: Alistair Vigier is the CEO of ClearWay Law

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Employment Contracts in Ontario: What Does The Law Say?