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Employment & Labour

Seek advice before signing employment agreements

Employees who seek legal advice before signing a contract may be able to enhance their entitlements on termination, says Barrie employment lawyer Scott Hawryliw, who frequently advises clients on employment contracts.

Hawryliw, founder of SRH Litigation, says contracts drafted by employers will often seek to limit employees’ entitlements to minimums set out in Ontario’s Employment Standards Act (ESA), which he explains are often considerably less generous than entitlements available according to the common law’s reasonable notice requirement.

“If a lawyer reviews a contract that has the employee accepting minimums under the ESA, then they are going to tell you to take that portion out or at least have it modified,” he tells AdvocateDaily.com. “Once you’ve signed it, it’s going to be hard to get around those clauses, so it’s a better idea to get some advice beforehand.”

In some cases, Hawryliw says prospective employees may not have the bargaining power to negotiate for the removal of unfavourable clauses, but it’s always better that they fully understand what they may be signing away.

Under the ESA, termination pay of between zero and eight weeks is due to workers, depending on their length of service. The Canada Labour Code, which applies to employees of federally regulated employers, contains similar provisions, he adds.

“Ontario’s Ministry of Labour does enforce the law, but not for anything above the minimums,” Hawryliw says. “In my experience, it’s rare that an employer will fail to provide an employee with their ESA minimums because it’s widely known at this point.”

Still, he says any contract that provides for less than the employees are entitled to under the ESA will not be enforceable. In fact, a number of court decisions have gone against employers judged to have gone too far in their restrictions.   

When there is no clause limiting entitlements or no contract at all, Hawryliw says that an employee’s notice period or pay-in-lieu is determined under the common law, based on a number of factors, including the person’s age, length of service, level of responsibility, and ability to find a new job. This typically results in more generous terms for the worker, he adds.

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