Sometimes, during the hiring process, an employer may opt to send an initial job offer and then, once accepted, follow up with a more detailed set of terms. This procedure, while seemingly innocuous, can prove to be high risk, carrying with it the potential for significant and unintended liability. An employer may find itself unable to rely on the ‘follow-up’ set of terms and be stuck with the deal set out in its initial job offer.

For any Ontario employment agreement to be enforceable at law, it must have three components: 1) an offer; 2) acceptance of the offer; and 3) consideration.

In Ontario, where a dispute between an employer and an employee (or former employee) cannot be resolved informally – which is usually a more expedient and practical option - recourse to the courts is generally available.

In a short decision, the Court of Appeal for Ontario has recently clarified an important question regarding fixed-term employment contracts. Namely, whether a fixed-term itself can be considered a type of termination clause.

2024 got off to a bang in the world of employment law. In a recent trial level decision, an Ontario judge has found yet another termination clause illegal and unenforceable. In so doing, the court accepted an entirely novel argument for why termination provisions may be read as impermissibly contracting out of the mandatory requirements of the Employment Standards Act, 2000

Due to recent changes to the Canada Labour Code (the “Code”), federally regulated employers are now required to provide workers with written “employment statements”.

From time to time, it may make sense for employers to revise and renew their employment agreements for existing staff. Updating contracts needs to be handled carefully and, as such, this article offers tips and best practices for this process.  

We often come across fixed-term contracts in our legal practice. Employers have varying reasons for wanting to use such agreements. Perhaps funding for an employee is tied to third party grants, or an employer wants to temporarily replace an existing worker during their period of maternity leave. Whatever the justification, we generally advise employers to think twice before using fixed-term contracts.

Our firm is often retained by employees and employers to provide advice on dismissal entitlements. One of the first places we look in this regard is to the parties’ written employment contract (if one exists). Employers have an incentive to implement written contracts as a means of limiting future dismissal costs. For similar reasons, contracts often come under heavy scrutiny by employees (and their lawyers) whenever a job termination takes place.

When drafted carefully, written employment contracts can be helpful tools. They provide a clear view of the intended relationship and proactively address common issues that may arise. In so doing, contracts offer transparency and reduce the risk of future disputes.

Equity compensation is one of the fastest growing categories of employee pay. More and more Canadian workers are seeing some form of employer-issued equity (via stock options, restricted share units, employee purchase plans, etc.) offered as part of incentive compensation packages. However, little attention tends to be given to the fine print that accompanies equity pay.

It is quite common for employers to offer a bonus or incentive payment as part of a worker’s compensation. Bonuses serve a useful dual function – incentivizing individuals to perform their duties well and then rewarding achievement of the same.

Most employment contracts operate for an indefinite period. Lesser seen are fixed term agreements. The latter are most often used in the context of a sale of business and in the not-for-profit sector (where funding is frequently tied to time-limited grants). Regardless of their underlying motivation, fixed term contracts come with significant risks for employers.

Termination clauses are found in most written employment contracts. They typically set out a fixed formula to govern severance entitlements upon dismissal.

Generally speaking, Ontario employees are entitled to receive reasonable notice of their dismissal from employment (subject to situations where the parties have agreed in writing an alternate lawful entitlement in this regard).

Hiring a new employee is an investment, and it is important to start the relationship on the right foot. Both parties need to have a clear understanding from the outset of their role, rights, and responsibilities. Where there is confusion in this regard, disagreement and disputes may follow.

A recent decision from the Court of Appeal for Ontario has the potential to render many existing contractual termination clauses unenforceable. This development will have a major impact on employee severance rights and the costs employers may be required to incur when dismissing workers.

COVID-19 seemingly came from nowhere and fundamentally altered our lives. It has brought challenges to many Ontario workplaces, exposing deficiencies in employment agreements and emphasizing the need for strategic planning and preparedness.