Congratulations! A job offer can mean exciting new opportunities and mark growth in your career. It’s also lovely knowing you were the selected candidate for the role. Before you accept the new employment opportunity, there are a few things to keep in mind.
What are you offered, and when?
You don’t need a written employment contract to have an employment contract. Sounds confusing, but it’s true. While we usually think of employment contracts as lengthy documents written by a lawyer containing all sorts of sections and terms and definitions, there’s no set law about how long an employment contract needs to be or what it must contain.
An employment contract does not need to be written at all, in fact. If you are hired on a verbal agreement or even a handshake, where someone offers to pay you wages in order to perform services, that then creates an unwritten employment contract. In that case most terms are governed by the minimums outlined in the Employment Standards Act (the “ESA”), except for what an employer might owe you if you are wrongfully terminated, for which there is no clear written limit in place. That ambiguity is one of the primary reasons employers write employment contracts.
Yet an employment contract also does not need to be formal in nature. If your new employer emails you, for example, offering you the position and outlining a few basic terms such as salary, start date, and your vacation pay, that email then forms the basis of your employment contract. In that scenario, any terms not included in that email, such as your rights if terminated without cause, are governed by the ESA but not restricted to the ESA minimums only.
This is why, in most instances, any email confirming a job offer will usually include clear language that it is conditional on the signing of a full employment contract, as well as possibly reference checks, criminal checks if required, etc. Practically speaking, if a decision is made to hire quickly, they may want to secure your commitment and interest even though the contract may not be completely drafted. This is perfectly normal, so long as that offer is clear to note that the offer is conditional upon a second contract – otherwise the initial email is the agreement.
When should the employment contract be provided?
Any written contract that you receive, whether it’s just a simple email or the more complete document that’s conditional upon you receiving the job, needs to be reviewed and completely signed off BEFORE you start working in order to be legally valid. Here’s why:
For any contract to be legally valid, there needs to be some form of ‘consideration.’ This means that the person signing a document has to receive something of value in exchange for agreeing to the terms of the contract. In the employment sense, that means that you are receiving new employment in exchange for signing the contract, and if you don’t sign that contract, the offer of employment goes away.
If, however, the employment contract comes your way after you start working, that new job is no longer valid consideration, since you’ve effectively started working without a contract. In that case, just as if your employer were to present you with a new contract while you were already working, there needs to be an additional something of value offered. This can come in the form of a salary increase, added benefits, a signing bonus or something of the sort, but it must be above and beyond the job you have already accepted and started to perform.
What to look for in an employment contract?
Once you have the employment contract in hand, what should you be looking for? There are some key terms that should be included such as your new job title, your new job responsibilities (at least the core ones), your new wages, and any other compensation that you expect to receive.
Most employers will build a lot of flexibility into a contract because a company can change over time, and roles and the responsibilities may change with that. If your hours of work are listed as 9-5, but there may be the odd day where you will need to work until 5:30 or 6, the contract usually builds in that discretion so that the employer can make small adjustments as necessary. The contract might also note any sick leave or vacation policies, any benefits or bonuses you may expect, and what laws govern the terms of your employment.
One of the pieces that may be missing from the employment contract you receive is a policy handbook. In fact, the written contract may reference external policies, which can include everything from a dress code to a social media policy to extended vacation, etc. Those policies can all form part of your employment contract, which also means that you should be able to review them in detail before you agree to sign off.
What are your rights if subsequently terminated?
One of the most important parts of an employment contract is the termination section. If you are leaving a job to accept a new position elsewhere, you need to understand your entitlements should your new employer subsequently determine you are not a good fit. Many employers will craft employment contracts to limit your rights upon termination to only the ESA minimums. These minimums oftentimes do not provide employees with enough time to find alternative work when terminated. You may want to negotiate with your new employer a greater notice entitlement to ensure that you have the time needed when having to transition to an alternate job.
An employment contract may also include language about an initial probationary period, sometimes 3 months or sometimes longer. Legally, probationary periods only occur for the first 3 months of your employment and must be clearly outlined in the employment contract. An employer must also treat you with good faith during this time and give you an opportunity to succeed. Any longer probationary period will likely not have any legal effect.
Final Thoughts
Receiving a job offer is exciting. However, before you accept or sign on the dotted line, take the necessary steps to have your employment contract or employment terms reviewed carefully by an employment law expert. You need to understand what you are signing up for and what rights you will have during and at the end of this new opportunity should you subsequently be terminated.
Our employment lawyers are here to help. Not only do we regularly draft employment contracts for our employer clients, but we help employees throughout the Cambridge, Kitchener, and Waterloo region review employment contracts before they sign to make sure that they’re getting exactly what they deserve, and not signing away any crucial rights. Contact our office today to set up an employment consultation.