When you receive a job offer, your new employer will likely ask you to sign a contract of employment. Many people review the negotiated terms, such as salary, bonuses and vacation time, but overlook other key provisions in the agreement.
An employment agreement often contains other important information that has implications throughout the working relationship and when you lose your job. Here are some of the key clauses to watch for in a new employment contract.
READ MORE: What you need to know before you sign a contract — even if your employer asks you to
The termination clause
The termination clause is one of the most important — yet most often ignored — passages in an employment agreement. They have become increasingly common as companies use them to try to limit your severance package upon termination. In my experience as an employment lawyer, it’s extremely rare that these clauses are written to favour employees.
The good news for employees is that most of these clauses are poorly written, in a way that renders them useless. This means that if you lose your job, you may still be able to collect full severance — which can be as much as 24 months’ pay — despite the existence of the termination clause. That’s why it’s a good idea to speak to an employment lawyer, like the team at Samfiru Tumarkin LLP, before accepting any language in your contract.
The probation clause
Most employees assume that when they start a new job, they are automatically covered by a probationary period that allows their employer to fire them at any time during the period without a severance package.
A person will not be subject to a probationary period unless the employment contract contains an enforceable probationary clause. If your contract doesn’t say anything about probation, you will be entitled to a severance package — even if your employment ends within the first three to six months.
Your severance package will not necessarily be smaller just because the employment period was short, as courts recognize it is often difficult for someone who has been at a job for only a few months to find new employment.
READ MORE: Top 5 myths about probation periods you need to know when starting a new job
Changing parts of your job
Companies try to insert terms into employment contracts that allow them to unilaterally — that is, without your permission — change fundamental aspects of your job, such as your duties, position, working hours or shifts, or even where you work. These terms should be negotiated to limit the employer’s flexibility to modify your employment without your permission.
Renegotiating your existing employment contract
I have recently talked to several long-term employees who have been asked to sign new employment agreements, often in return for a one-time bonus. This often happens as employers realize that long-term employees are owed a significant amount of severance and try to limit their termination costs through contractual changes.
In one case, a 20-year employee was asked by her employer to sign a new agreement that would significantly limit her rights to a fair severance package. She was aware that her manager intended to let her go soon after she signed.
I advised her against accepting the new contract. The employee was terminated a few months later, and our firm, Samfiru Tumarkin LLP, was able to negotiate full compensation, as there were no terms in the old agreement limiting her severance package.
READ MORE: 5 facts about severance pay you need to know, according to an employment lawyer
Many employees are under the impression that they need to sign a contract to protect themselves. But I never recommend asking an employer to enter into a written agreement. If there are aspects of your job that you have negotiated with your employer that you need to confirm in writing, send your employer an email confirming those terms.
If you are presented with a new contract, there is no rush to sign it. If you are unsure about what you are signing, you can ask for more time to review the contract and seek legal counsel. An experienced employment lawyer, like the ones at Samfiru Tumarkin LLP, can help better understand the terms of your agreement and advise you on how to navigate the situation.
Have you been asked to sign a new employment contract? Do you need help understanding how it may affect your rights?
Contact the firm or call 1-855-821-5900 to secure assistance from an employment lawyer in Ontario, British Columbia or Alberta. Get the advice you need — and the compensation you deserve.
Gledis Rada is an employment lawyer and associate at Samfiru Tumarkin LLP, Canada’s most positively reviewed law firm specializing in employment law and long-term disability claims. The firm provides free advice on Canada’s only Employment Law Show on TV and radio.