Employment Contract Review Guide
What to Watch For Before You Sign
Critical Timing Alert
Review your contract BEFORE signing. Once you've accepted and started work, your negotiating power drops significantly. Most employers expect negotiation on initial offers.
Congratulations on your job offer! Now comes the crucial step many people skip: actually reading and understanding your employment contract. This isn't just legal paperwork—it's the foundation of your entire working relationship and could impact your financial security for years to come.
Why Employment Contract Review Matters
Financial Protection
A properly negotiated severance clause could be worth tens of thousands of dollars if you're terminated.
Career Mobility
Avoiding restrictive covenants keeps your career options open and prevents legal complications.
Peace of Mind
Understanding your rights and obligations eliminates surprises and workplace anxiety.
🚩 Contract Red Flags to Watch For
These clauses are commonly included in employment contracts but can significantly harm your interests. Don't sign without understanding—and ideally negotiating—these provisions.
Termination "For Cause" Definition
Broad language that could deny severance pay for minor infractions
Watch for clauses that define "cause" to include performance issues, attendance problems, or subjective standards. Proper cause should be limited to serious misconduct like theft, fraud, or criminal activity.
ESA Minimums Only
Severance limited to Employment Standards Act minimums (often inadequate)
Ontario ESA provides minimal severance (1 week per year). Common law entitlements are much higher (3-4 weeks per year for most employees). Accepting ESA minimums could cost you thousands.
Unreasonable Non-Compete
Clauses that prevent you from working in your field after termination
Non-compete clauses are generally unenforceable in Ontario except for very limited circumstances. However, they can still create legal costs and employment barriers.
Broad Confidentiality Clauses
Excessive restrictions on discussing workplace issues
While legitimate trade secrets need protection, overly broad confidentiality clauses can prevent you from discussing workplace harassment, safety issues, or other protected activities.
💪 Negotiation Strategies That Work
Most employers expect some negotiation on contract terms. Here are the most important areas to focus on, ranked by potential impact on your financial security and career flexibility.
Severance Package Enhancement
High ImpactPush back on ESA minimums. Request notice periods that reflect common law entitlements (typically 3-4 weeks per year of service, capped at 24 months).
Benefits Continuation
Medium ImpactEnsure health, dental, and other benefits continue during notice period, not just salary.
Working Notice Alternatives
Medium ImpactRequest pay in lieu of notice rather than working notice, which gives you flexibility to find new employment.
Probationary Period Limits
High ImpactStandard probation is 3 months. Anything longer (especially 6-12 months) should be questioned and ideally reduced.
Intellectual Property Clarification
Medium ImpactEnsure the contract clearly defines what constitutes company IP vs. your pre-existing knowledge and skills.
Restrictive Covenant Removal
High ImpactPush for removal or significant limitation of non-solicitation and non-compete clauses.
⚖️ Ontario Legal Requirements
Employment Standards Act (ESA) Minimums
- 3 months or less service: 1 week
- 3 months to 1 year: 1 week
- 1-3 years: 2 weeks
- 3-4 years: 3 weeks
- 4-5 years: 4 weeks
- 5-6 years: 5 weeks
- 6-7 years: 6 weeks
- 7-8 years: 7 weeks
- 8+ years: 8 weeks
- Severance pay for companies 50+ employees
- Benefit continuation during notice
- Vacation pay entitlements
- Protection from reprisal
Common Law Entitlements (Usually Higher)
Ontario courts typically award much more generous notice periods based on factors like:
- Length of service (typically 3-4 weeks per year)
- Age at termination
- Position/responsibility level
- Likelihood of finding comparable employment
- Character of employment
- Economic conditions
- Manner of termination
- Industry standards
✅ Employment Contract Review Checklist
Use this checklist to ensure you haven't missed any important provisions. If you can't check all these boxes, consider professional legal review before signing.
🤝 When to Get Professional Legal Review
High-Stakes Situations
- • Senior management or executive positions
- • Salary over $100,000
- • Stock options or equity compensation
- • Unusual or complex contract terms
- • Non-compete or non-solicitation clauses
- • Contract work or independent contractor agreements
Mithril Law Employment Review
- • AI-assisted contract analysis in 24 hours
- • Flat fee pricing (typically $500-750)
- • Written summary of key terms and risks
- • Negotiation strategy and talking points
- • Red flag identification and solutions
📋 Sample Contract Language
❌ Poor Severance Clause
"Upon termination of employment for any reason other than just cause, the Company's sole obligation shall be to provide the Employee with the minimum notice or pay in lieu thereof as required under the Employment Standards Act."This limits you to ESA minimums, potentially costing you months of additional severance.
✅ Better Severance Clause
"Upon termination without cause, the Employee shall receive notice or pay in lieu of notice equal to four (4) weeks for each completed year of service, to a maximum of twenty-four (24) months, plus continuation of benefits during the notice period."This provides reasonable severance that reflects common law entitlements.
Don't Sign Blind—Get Professional Review
A professional contract review typically costs $500-750 but could save you tens of thousands in severance, prevent career limitations, and give you negotiating leverage. The math is simple.
Free initial consultation • Same-day response • Flat fee pricing
Legal Disclaimer: This guide provides general information only and does not constitute legal advice. Employment law can be complex and fact-specific. For advice about your specific situation, consult with a qualified Ontario employment lawyer. Mithril Law is licensed by the Law Society of Ontario.