Employment Contract | HTW Law - Employment Lawyer

In employment law context, any contractual term that attempts to limit an employee’s entitlement to the Employment Standards Act (ESA) minimum standard is under strict scrutiny. Employment agreement drafting is substance over form and a lot of legal issues are involved, and drafting enforceable employment agreement contractual terms in an employment contract is becoming more of an art than a science. It takes an experienced employment lawyer to draft a legally enforceable employment contract.

An employment agreement is a contract that requires offer, mutual agreement, consideration and acceptance. In employment law context, if an employer has acted in a way that forms an expectation, even if it’s more than the ESA minimum standards requires, the employer is estopped from not honouring such expectation. In employment law, an employer cannot change the contractual terms of the employment contract unilaterally without valuable consideration in exchange. Do note that a promise for continue employment, in employment law context, DOES NOT count as a valuable consideration in exchange.

In employment law context, a restrictive covenant in an employment contract such as non-competition clause or non-solicitation clause that stipulates that a worker is not allowed to compete against employer is only enforceable if it is limited in scope and duration. If the scope is overboard or the duration is too long, it will not be enforceable in employment law context.

The current employment law legal position on the issue of just cause is that except in truly egregious cases, a Court will rarely find just cause. And if you have a just cause termination clause in your employment agreement, if it allows an employee to be terminated absent wilful misconduct, the ENTIRE terminate clause (both with and without cause sections) will be stroke out by the Court in an employment law case! See e.g. Waksdale vs. Swegon North America Inc., a 2020 Ontario Court of Appeal Case.

Even if a termination clause for termination without cause exists in an employment contract, unless the termination clause specifically stated that the common law reasonable notice is to be excluded, otherwise it does not preclude the application of the common law “reasonable notice” in the employment law context.

 

Please note that according to a recent 2022 decision of Gracias v Dr David Walt Dentistry Professional Corp, 2023 ONSC 2052 (Div Ct), aff'g 2022 ONSC 2967, the Court states that employers and employees can rebut the presumption of reasonable notice by agreeing to a different notice period only if the agreement in its entirety complies with the minimum employment standards of the Employment Standards Act. Unless the Court of Appeal or the Supreme Court of Canada steps in and rules otherwise further down the pipeline, the Dr David Walt Dentistry Professional Corp test is here to stay.

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Please click here to learn more by reading the following blog post:

 

Termination Clauses in Employment Contracts After Waksdale v Swegon North America Inc.

Even if your employment agreement survived all the employment law booby traps thus far doesn't mean that it arrived home safe and sound just yet. In employment law, an employment agreement termination clause that specify the notice required for a without cause situation may not be enforceable if the employment contract specifically stipulated that severance, and other employee benefits are to be included in the “in lieu of notice” payment, as the employment agreement has the potential of render a termination below the “minimum guarantee” of ESA.

In employment law context, the termination clause is not enforceable if it is ambiguous and unclear as to whether the minimum ESA standard has been met. If the employee hasn’t been informed of what the ESA minimum was before signing the employment contract, a Court will likely NOT enforce the employment agreement termination clause in an employment law case. And the list goes on and on forever ….

If you are an employer, you are very strongly advised to retain an experienced employment lawyer to draft a legally enforceable employment contract. In many cases, it’s a make-it-or-break-it move. If you are an employee, you are well advised to seek legal advice from employment lawyers before signing any employment agreement or accepting "severance package" or "termination package" to protect your employment law entitlements.

Act NOW, be proactive. HTW Law can help. Call us now at 647-849-6582 or  Contact Us  Now for Immediate Assistance. Yes, it’s worth it.