What Employees in Ontario Need to Know Before Signing an Employment Contract in 2025

If you’re starting a new job or transitioning roles, one of the most important documents you’ll encounter is your employment contract. Before putting pen to paper, it’s critical to understand what you’re agreeing to, as employment contracts are legally binding agreements that may significantly impact your rights and obligations.

At Lecker & Associates, we’ve helped thousands of Ontario employees navigate the complexities of employment contracts. Here’s what you need to know before signing yours.

What Is an Employment Contract?

An employment contract is a formal agreement between you and your employer that outlines the terms and conditions of your employment. It can be written or verbal, but written contracts provide much clearer evidence of your rights and responsibilities, as well as your employer’s obligations to you.

 Most employment contracts typically outline terms governing your

• Position title and duties
• Compensation and benefits
• Work hours and overtime
• Vacation entitlement

In some cases, contracts will also include clauses covering

• Confidentiality and non-disclosure
• Non-solicitation and non-compete
• Termination terms and severance provisions

While employment contracts can vary in their terms, Ontario’s Employment Standards Act (ESA) establishes the minimum requirements that employers must meet, covering areas such as minimum wage, public holidays, or severance pay. Employers can always offer more than these minimums, but they can’t legally provide less, even if you agree to it. In Ontario, the common law typically gives employees greater rights than the ESA, especially when it comes to termination pay or severance. However, you might unknowingly give up some of these rights by signing a contract that meets ESA standards but is less generous than what common law provides.

Never Sign Without Understanding the Terms

When you sign an employment contract, you’re legally bound by what’s in it. Most employers mean well, but some include terms that protect their interests more than yours. By signing the contract, you are effectively saying that you agree to its terms, even if you haven’t fully read or understood them, which means you may be accepting limits or obligations that restrict your options or leave you vulnerable.

Despite all the ways employment contracts differ, there are a few areas where employees are most likely to run into issues or face unfavourable terms.

• Overly restrictive non-compete or non-solicitation clauses that limit your future employment options in your field or prevent you from working with certain clients, even though you’re no longer working for your employer. A non-compete or non-solicitation clause exists to protect your employer’s business interests after you leave the company, but sometimes employers take these protections too far. For example, Sydney Norton had worked as a pharmacist for M & P Drug Mart Inc. for 40 years when he resigned and took a job with a different pharmacy, which was in violation of the non-compete clause he had agreed to. The covenant essentially prohibited Mr. Norton from doing any kind of work for a company even remotely similar to his previous workplace for one year after leaving the position for any reason whatsoever. Unsurprisingly, the judge found these terms to be too broad and unreasonable to enforce. Generally, non-compete clauses are unenforceable in Ontario since the Working for Workers Act came into effect in 2021, which prohibits their inclusion in employment contracts except in a few circumstances, like high-level executives or the sale of a business.  
• Insufficient termination or severance provisions that leave you with inadequate compensation if your employment ends. Termination clauses establish how and when either you or your employer can end your employment, including the notice period and the grounds for termination (such as misconduct, poor performance, ineligibility, or layoff), as well as what severance pay you are entitled to upon termination without cause. These provisions are meant to bring clarity and fairness, reducing the risk of disputes or wrongful termination; however, sometimes employers cut corners. For example, Marcela Garreton was terminated for cause after working for Complete Innovations Inc. for roughly two years. While her contract met ESA severance standards at the time, it would have violated the ESA if she had continued her employment with the company for over five years. The Court found that even potential future violations nullify a clause and make it unenforceable. Ms. Garreton was awarded $25,000 for wrongful dismissal. Even clauses that seem compliant can limit your rights down the line. Understanding your contract and your rights can help you avoid being shortchanged if you’re ever let go.
• Ambiguous language around duties or performance expectations that make you vulnerable to unfair performance evaluations or increased responsibility without increased compensation. These clauses are meant to clearly define your role and responsibilities. Ambiguous language opens you up to the risk of unfair performance reviews, like in the case of Esther Brake. Ms. Brake had worked for McDonald’s for nearly 20 years when she was dismissed for poor performance. Prior to her dismissal, she was placed on a progressive discipline program, with 90 days to achieve the goals that she and her employer had agreed to. Despite achieving nearly all the objectives, her employer took the position that she had failed and effectively dismissed her. The Court ultimately found that the goals set for Ms. Brake were arbitrary and unfair.  
• Unclear probationary periods leave room for confusion about job security. The purpose of a probationary period is to allow both you and your employer a trial period to ensure you’re suitable for the position. For employers, it’s a chance to evaluate the employee’s performance, reliability, and fit within the team before confirming permanent employment. For the employee, it’s a chance to see whether the role and environment meet your expectations. However, because it’s meant to be a temporary trial period, employees have limited legal protections during this phase, which is why it is essential to be clear about the duration and evaluation expectations. Alexander Nagribianko wasn’t so lucky. The entirety of the probation clause in his contract was simply, “Probation…Six months.” When he was terminated before the end of the six-month period, Mr. Nagribianko sued for wrongful dismissal, claiming that because the clause was only two words long, it was unclear and thus unenforceable. However, the Court found that it was clear and, as such, enforceable. As a result, Mr. Nagribianko did not receive the standard set out by common law because he had agreed to the six-month period. Cases like this are a perfect example of why it is essential to understand the terms of your contract before you sign it. Without careful review, you could unintentionally give up rights that might have been negotiable with the right legal knowledge and guidance. Our expert employment lawyers at Lecker & Associates can help you understand your contract, protect your rights, and negotiate terms that work in your best interest.

Why You Should Consult an Employment Lawyer Before Signing

No two employment contracts are exactly alike. What might be reasonable for one role could be unfair or risky in another. An employment lawyer can

• Review your contract for unfair or illegal clauses
• Explain how the terms affect your rights and obligations
• Advise on negotiation strategies to improve your contract terms
• Help you understand your options if you feel pressured to sign quickly

Protect Your Career and Your Future

Don’t let an employment contract become a source of confusion or conflict down the road. Taking the time to fully understand the agreement before signing can save you significant stress, money, and legal headaches later.

At Lecker & Associates, we’re dedicated to protecting Ontario employees’ rights. If you have questions about your employment contract or need advice before signing, book a no-charge assessment with our experienced employment lawyers in Toronto.

📞 Call 647-694-2797 or book your no charge assessment today.