People are usually excited and nervous when they start a new job. Sometimes, amidst all that excitement, people forget to fully and adequately hash out the details of their employment contract. Or, even worse, a new employee signs something without truly understanding the consequences of what they are signing. So here are ten quick reasons (and there are others!) why employees should consider consulting an employment lawyer about their contract before signing:
1. Independent Contractor or Employee – an employee's rights will vary greatly depending on whether or not they are deemed to be an independent contractor or an employee. While the title in the contract will not be determinative (i.e. simply calling an employee an independent contractor will not make them one), it is important for employees or independent contractors to understand what the distinction will mean for them.
2. Basic Provisions – It is important for employees to understand the basic parameters of their employment contract as they are set out. What are the hours of work? Days off? Is the position indeterminate or for a set term? Especially where the employee knows their potential employer personally, there can be an attitude of, "I know that is what the contract says, but it won’t be enforced". Hopefully not, but employees should still know what they could potentially be bound to.
3. Overtime – Some professions are exempt from overtime provisions. Employers can also apply for exceptions to the rule. Managers are also exempt from overtime, but is the position truly a managerial one? Before employees accept that they are not entitled to overtime, it would be helpful to discuss the rules and exemptions with a lawyer, and how they might apply to their case.
4. Probation Periods – Employers often set out probation periods at the beginning of the contract. Sometimes the employee is not eligible for the health and benefits plan during this time. An Employee's rights under the Employment Standards Act, 2000 may also be different during a probation period. But not all probation periods are legally enforceable. Employees should understand whether or not the probationary period will be enforced against them, and what it would mean if it was enforced.
5. Intellectual Property – In the modern age, more and more is happening with technology, and the ideas around technology. It is becoming increasingly common for employers to have an intellectual property clause in their agreements. This may mean that any products developed while at work belong to the company, even if the idea was completely conceived and developed by the employee, become the property of the employer. People often think of software designers, and this would apply to them, but intellectual property can even be found in a paper or presentation of an employee. There could potentially be some debate on whether the intellectual property belonged to the company, or the individual employee.
6. Non-Solicitation/Non-Compete – If an employee no longer works for the employer, these provisions will prevent an employee from soliciting the business of the employer or competing with them. They vary in range, geographical scope and time, and they are not always enforceable…but sometimes they are. Before getting into an employment relationship, it is important for an employee to understand what the prospects are when they leave that employment.
7. Benefits/Pension – Benefit and Pension plans are complicated things, and even small changes can have a ripple effect. It is important for employees to understand what they are entitled to, and when. Given the complex nature of the language in these plans, employees should think about what benefits are important to them, and then seek confirmation that those are covered in the contract as it stands.
8. Notice on Termination – These provisions outline what the employee is entitled to should their employment be terminated. Of particular interest are the provisions for notice if the termination is without cause. The Employment Standards Act, 2000 sets out the minimum notice allowed, and properly worded contracts can limit the notice to what is outlined in the Act. Once again, whether the employee will actually be bound by that provision depends on the specific words used and a variety of other circumstances. Employees have to understand going in to an employment relationship what this provision will potentially mean if they are ever laid off.
9. Why it must be negotiated before work starts – These contracts must be negotiated and signed before the employee starts work, or must be accompanied by an additional incentive (bonus, promotion, etc.) if they are to be binding. If an employee comes in with a new contract to be signed mid-employment, there are a variety of factors to consider when determining whether this would be binding. Also, any terms or conditions important to the employee usually have to be added prior to the contract being signed.
10. There might be more wiggle room than you think – There is often a sentiment among employees that they should just be glad to have a job, and there is no point asking for improvements to the contract. An employment lawyer might have some creative ways of helping employees get access to things that really matter to them.
A quick trip to an employment lawyer will potentially save you a huge amount in the long run.