Peter Straszynski discusses employment contracts including the
importance of written contracts of employment, the most important
part of a written employment contract, "consideration",
whether termination clauses in written contracts are always binding
on employees and what happens if the contract says nothing about
termination as part of the Torkin Manes LegalPoint Video
Q. Why are written contracts of employment
Written contracts of employment can be very important tools in
an employment relationship...... contracts set out the essential
terms and conditions of the employment...... whether it be start
and end dates, compensation and incentives, vacations, termination
entitlements, or anything else you can think of.... a written
contract is an opportunity to simply and clearly set out the terms
and conditions of the relationship, hopefully helping to avoid
confusion and disputes.
Q. What is the most important part of a written
In my view, the most important part of any written employment
contract is the termination clause....... When properly drafted, it
tells both the employer and employee what their respective rights
and obligations are in the event that either party wishes to
terminate the relationship....... A well drafted termination clause
can help reduce disputes, and expensive wrongful dismissal
Q. What is "consideration"?
When an employee is asked to sign a written employment
agreement, they must receive something of value in exchange.... we
call it "consideration" for entering into the
contract....... Without it, the written agreement may not be
binding..... Let me illustrate for you.... When a new employee is
asked to sign a contract as a condition of accepting the job, the
new job itself is the "consideration" for the contract.
Where an existing employee is asked to sign a contract, they must
receive something new of value as consideration. Promotions,
raises, or other such benefits are examples of valid
Q. Are termination clauses in written contracts
always binding on employees?
There are numerous circumstances where termination clauses will
not be enforced by our courts. The most common reasons would
include things like:
lack of consideration...........
poor drafting or ambiguous language.............
or a termination clause that provides for something less than
the minimum requirements of the ESA.
These are the types of mistakes that employers can make that
would cause judges to say that termination clauses will not
"valid" or "enforceable" against an
Q. What if the contract says nothing about
Where a contract is "silent" on the issue of
termination, or if a termination clause is not enforceable for any
reason, then the "common law" applies........ Under the
common law, the employee will be entitled to "reasonable"
notice of termination or pay instead, unless of course, there is
Just Cause....... If you would like to learn more about
entitlements on termination, see our related video on the topic of
Terminations Without Cause
Written contracts of employment can be very powerful tools....
if they are done right....... Employers who are hiring, or who
otherwise wish to introduce contracts into their working
relationships, should consult with knowledgeable counsel so that
they can rely on these agreement in the future...... Similarly,
employees being asked to sign contracts should definitely get
appropriate advice, so that they fully understand their rights,
both during the relationship and at the time that the relationship
may be terminated.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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