By: Stephanie McDonald and Baljinder (Bal) Singh Tiwana
Having an employment lawyer review your job offer is highly recommended. A careful review helps protect you from potential risks and costly issues that may arise later.
An employment lawyer can clarify your legal rights and obligations before you accept an offer. While you may not be able to negotiate out of every unfavourable term, a lawyer can identify potential problematic clauses. This insight allows you to make an informed decision and, where possible, negotiate more favourable terms.
In some cases, you may have greater bargaining power. This leverage depends on your role, experience, and the employer’s needs. With the right guidance, you can use that leverage to improve key areas of your employment agreement.
How We Can Help You Negotiate
We can support you through the negotiation process by:
- Drafting tailored, ghost-written emails, which you can send directly to your employer
- Where suitable, get involved directly by communicating with the employer on your behalf
- Identifying legal risks and red flags
- Explaining how specific terms may affect your legal rights in the present and in the future
Our goal is to ensure you fully understand your agreement before signing.
Common Red Flags in Employment Contracts
1. Temporary Layoff Provisions
Some employment contracts include clauses that permit temporary layoffs. These provisions can limit your ability to claim constructive dismissal unless the layoff becomes a termination.
For example, if your employer unilaterally changes a fundamental term of your employment agreement, such as stopping your work, you would ordinarily be entitled to treat that change as constructive dismissal.
However, agreeing in advance to a temporary layoff provision changes this. By accepting such a clause, you effectively consent to the possibility of a temporary interruption in your work. As a result, a layoff will generally not be considered a fundamental breach of your employment contract, provided the lay off period remains within the legal limits. Read more here about temporary layoffs: Temporary Layoffs in Ontario: Know Your Employee Rights.
2. Unilateral Change Clauses
Employers may include a clause in your employment contract that allows them to change your duties, responsibilities, reporting structure, title, or even compensation. These clauses can significantly affect your job security and career progression and make it harder to claim constructive dismissal.
3. Restrictions on Side Work
Certain agreements prohibit side hustles. These restrictions can limit your ability to earn additional income or pursue personal projects in your free time. Most clauses allow side hustles only with the employer’s consent, which could be withheld.
We recommend that you consider the pros of cons of continuing the side hustle. If you plan on continuing the side hustle, we can also explain the pros and cons of seeking consent from your employer, and the consequences of the employer withholding their consent.
4. Overly Restrictive Non-Solicitation and Non-Compete Clauses
Non-solicitation and non-compete clauses can restrict your future employment opportunities. In Ontario, non-compete clauses are generally unenforceable unless you hold a senior executive position i.e. part of the c-suite (such as a CEO). However, each situation is unique and requires careful consideration.
5. Termination Clauses
Termination provisions are among the most important parts of any employment contract. We carefully assess these clauses to determine whether they are legally enforceable.
Where the termination clause is legally enforceable, we may recommend negotiating for an agreed-upon severance amount that exceeds the minimum standards under the Employment Standards Act.
If a termination clause is unenforceable, you would be entitled to reasonable notice of the termination of your employment without cause. In these circumstances, we wouldn’t recommend negotiating the clause because its invalidity benefits you.
6. Compensation Structure
We review compensation structures to make sure you understand exactly how you will be paid before you accept an offer. Salary is only part of the picture. Bonuses, commissions, incentives, equity, and other variable compensation can significantly affect your earnings. We assess whether the compensation structure is clear, whether performance targets are realistic and attainable, and whether the plan gives the Company too much discretion to reduce or withhold payments. Identifying these issues before you sign can help you avoid costly surprises later.
We also review the compensation plan to explain what happens if your employment ends. Many plans contain terms that affect your entitlement to bonuses or commissions if you resign or if the Company terminates your employment, with or without cause. We explain how those provisions may apply to your situation, whether they are likely to be enforceable, and how they could affect your rights. Where appropriate, we also provide strategic advice about the timing of a resignation or career move so you can maximize the compensation you have earned.
Conclusion
Before accepting a job offer, take the time to understand what you are signing. Workplace Sage Legal can review your employment off to uncover hidden risks, strengthen your negotiating position, and help you secure fair and reasonable terms. Seeking legal advice before you sign anything, can prevent costly disputes and provide peace of mind as you begin your new role.
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Learn more about employment law through the articles below:
- What to Expect During an Employment Lawyer Consultation
- Who is entitled to Reasonable Notice, and how is it calculated?
- What Employees Must Know About Without Cause Terminations in Ontario
DISCLAIMER: This article/blog is provided for educational/informational purposes only. This blog does not constitute legal advice. Do not rely on any advice before speaking with a lawyer. This blog does not form a solicitor-client relationship.
