Avoiding the Employment Contract Part 3

Written on behalf of Peter McSherry

This is part three of our ongoing analysis of key issues in written employment contracts.

Even where an employment contract is legal and enforceable, there remain employee remedies which the contract cannot take away.

Human Rights Remedies

Ontario law prohibits an employer from acting unfairly towards any employee based on certain protected human rights. These include race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sexual orientation, gender identity, gender expression, age, record of offences, marital status, family status or disability.

These fundamental rights cannot be eliminated by the employment contract or “contracted out of”. Termination based on such protected rights will lead to a remedy no matter what the termination clause in the employment contract may say.

Implied Term of Fair Dealing

If the employer terminates you due to unfair action, even if this is not a protected right by human rights law, there may still be the available remedies of aggravated damages to compensate you for emotional harm, or punitive damages designed to punish the employer when the action is deliberate or malicious.

A good example of unfair action by an employer is where an employer terminates an employee based on allegations of serious wrongdoing such as fraud, workplace abuse, or sexual harassment without a proper investigative basis. The employee, when these allegations are unfounded, may have a substantial damage claim, even if the employment contract sets out what appears to be a valid and enforceable termination clause. This subject is reviewed also in a prior review.

Non-Compete Terms

This issue is also reviewed in a prior post in greater detail.

Clauses in an employment agreement which purport to prevent an employee from completing against the employer are presumed to be unenforceable at law and are very difficult for an employer to uphold.

A non-solicitation term, which prevents the employee from soliciting business from customers with whom he or she had regular contact, may be valid, provided that the time period is reasonable, such as 12 months.

Sometimes the non-solicit states that the employee is not allowed to even accept business from past customers, in which case it will likely be seen as a non-compete and hence very hard to enforce.

Let Advice Guide Your Actions

Employment contracts are often not what they appear to be. Always get legal advice from an employment lawyer before you sign anything, and certainly when facing termination and a clause or language which limits your rights at that time.

If you have questions about your employment contract, contact the offices of Guelph employment lawyer Peter McSherry. We can guide you through the issues, help you understand your rights, and defend your position. Contact us online or by phone at 519-821-5465 to schedule a consultation