An employment contract sets out the terms of your job, including pay, duties, hours, and what happens if the employment ends. In Canada, these agreements are common — but they don’t always reflect what the law actually requires an employer to provide.
Understanding how employment contracts work in Canada is critical before you sign one, rely on one, or challenge one.
What Is an Employment Contract?
An employment contract is a written or verbal agreement between an employer and an employee that outlines the terms of employment.
Most include details such as:
- Job title and responsibilities
- Salary or wages
- Hours of work
- Benefits and bonuses
- Termination and notice provisions
Even if you never signed a written agreement, you may still have an enforceable employment contract based on what was agreed to verbally or implied through your work.
Why Employment Contracts Matter
Employment contracts often determine what happens when your job ends.
Many contracts are designed to:
- Limit severance or notice on termination
- Restrict what you can do after leaving a job
- Replace your common law rights with minimum standards
⚠️ Employees frequently assume that a signed contract is automatically enforceable. That is not always the case.
Are They Always Enforceable?
No.
For an employment contract to be enforceable, it must meet legal requirements. Courts regularly refuse to enforce contracts — or specific clauses — that do not comply with employment standards legislation or that unfairly restrict employee rights.
Common problems include:
- Termination clauses that provide less than the law requires
- Probation clauses that attempt to eliminate notice improperly
- Restrictions that go beyond what is legally allowed
💡 Whether a contract or clause is enforceable depends on the law that applies and the specific wording used.
Key Clauses in an Employment Contract
Most employment contracts contain clauses that can significantly affect your rights. These clauses should be reviewed carefully.
Termination Clauses
These clauses attempt to limit severance pay and notice when employment ends.
Probation Periods
Probation clauses are often misunderstood and frequently unenforceable if not properly drafted.
Non-Compete and Non-Solicitation Clauses
These clauses restrict what you can do after leaving an employer.
Fixed-Term Contracts
Fixed-term agreements can limit severance rights if they are properly structured — but many are not.
Independent Contractor Agreements
Some contracts misclassify employees as contractors, affecting pay, benefits, and termination rights.
Each of these clauses has specific legal implications and should be reviewed in context.
Governed by Provincial Law
Employment law in Canada is governed primarily by provincial legislation.
That means:
- Rules differ by province
- Enforceability depends on where you work
- The same clause may be valid in one province and invalid in another
For province-specific guidance, see:
When Should You Review an Employment Contract?
You should review an employment contract before relying on it in important situations, including:
- Before signing a new job offer
- When being promoted or changing roles
- When asked to sign a new agreement during employment
- After being terminated or laid off
⚠️ Once a contract is signed or relied upon, it can significantly affect your legal options.
Get Advice Before You Sign or Rely on a Contract
Employment contracts can affect your income, job security, and severance rights.
Before signing — or assuming an agreement limits what you’re entitled to — it’s important to understand how employment law applies to your situation.
Getting advice early from a contract employment lawyer at Samfiru Tumarkin LLP can help you avoid costly mistakes and clarify what the law actually requires.