Employment agreements

Things to know

Employment agreements can be either verbal or in writing and for an indefinite term or fixed term
Employees must be provided with at least their minimum statutory entitlements in respect of terms and conditions of employment as set out in applicable provincial employment standards legislation
Written employment agreements are recommended at least if compensation terms are more complex, (for example, benefit and pension terms, if provided, should be set out in an agreement)
Neither private benefit insurance or pensions are mandatory entitlements
Restrictive covenants, like non-competition provisions, non-solicitation provisions, confidentiality, and intellectual property protections need to be in writing. To be enforceable, non-competition and non-solicitation provisions must be drafted narrowly. In Ontario, as of October 25, 2021, non-competition agreements with employees are void, other than (a) for C-suite executives; or (b) in the context of a sale transaction in which such agreements are entered into as part of such transaction.

Review your template employment offers and full agreements to ensure they are in compliance with Canadian law (for example, references to ‘at-will’ employment must be removed as this concept is not recognized in Canada)
Review your compensation structure and model, including incentive compensation and benefits, to ensure competitiveness in the market
Consider if you want to establish restrictive covenants or severance provisions and, if so, carefully draft them with legal counsel to ensure, to the extent possible, enforceability
If you want to hire foreign workers, such workers typically must apply for a work permit. Any employment agreement drafted for such foreign workers must be consistent with representations made in the application for the work permit.

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