The first legal act to be executed in employment may be signing an employment agreement. At first sight, this document may appear lengthy, though it is an integral part of your employment relationship.
Whether you are the employee or employer, an employment contract assists in setting up the rules and regulations of the working relationship and shields both parties against possible misunderstandings. However, knowing when this method is to your advantage and when you should be cautious is essential.
The Importance of Employment Contracts for Employees
From an employment relationship perspective, the employment contract assures employees. This includes the job description, salary, other remunerations, and other working terms and conditions between you and the employer.
An employment lawyer in Toronto will advise that contracts minimise the chances of ambiguity concerning your position and when you will get what was agreed upon. There is always a need to make sure that all essential terms of employment are well defined so that there are no misunderstandings later.
Contracts can also provide redress for violations of your rights and afford a legal remedy for enforcing legal rights like overtime wage, conditions of dismissal, and safety measures, among others.
The Importance of Employment Contracts for Employers
The employer’s point of view is that employment contracts ensure homogeneity in the organisation and safeguard ideas and business assets. Almost all companies in Toronto hire lawyers to ensure that the contracts follow the rules of the local labor legislation.
Clarity and Consistency
A contract offers standardisation since it makes it easy for the employees to know what is expected of them. This minimises misunderstandings and encourages more efficient working relations between individuals.
Protection of Intellectual Property
This is always the case because employment contracts contain provisions that seek to protect an employer’s proprietary information. Such provisions provide that the company owns all inventions or ideas conceived during employment to guard intellectual property.
Non-Compete and Non-Solicitation Clauses
Employers may implement some common restrictive covenants to prohibit employees from joining, creating direct competition with, or soliciting clients from organisations they used to work for. These clauses safeguard the company’s competitive advantage but must be rational since they can be quickly stricken down.
Termination Provisions
Drafting a contract also includes termination provisions, such as the notice period and the severance package. This safeguards employers and employees by ensuring they know the proper steps to terminate their employment contracts.
Dispute Resolution Clauses
These clauses define how the problem will be solved, and it is rarely through expensive legal battles but instead through mediation or arbitration. This is a time-saving and cost-effective process for both the employee and the employer in terms of legal costs.
When to Be Wary of Employment Contracts
While employment contracts are a reality, not all are equal, and one must be careful with particular clauses. A Toronto employment lawyer can help you avoid such mistakes.
Unreasonable Restrictive Covenants
The restrictive covenants in the contract, such as the non-compete or non-solicitation, may be worded broadly, hampering the kind of job you can get in the future. One should always look at such provisions with the necessary precautions and review them to qualify them as reasonable and fair.
Unfair Termination Clauses
Be very careful when it comes to termination clauses. It is also possible to agree on specific clauses enabling an employer to dismiss an employee without reasonable or proper notice or with insufficient severance pay. These clauses could put you in a financially risky position.
Waiver of Rights
In some situations, a contract may demand that one remove their rights, such as the right to sue in a court of law. Signing a waiver that prevents you from seeking legal redress is always a danger.
If there is any doubt regarding the employment contract terms or if some of them are considered unfair, one should seek legal advice. It is always advisable to consult an employment lawyer in Toronto for legal advice and better bargaining power. You must safeguard yourself and ensure the contract is in your favor as much as possible.
