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The hidden clauses concealed in job offers that can haunt you later

Norman Grosman|

That job offer that you’ve just received might not be what it seems to be. That’s because employers are increasingly protecting themselves (and removing protections from you) by slipping loopholes into your contract that can come back to haunt you later.

Given the tight job market that Canadians have been facing since the start of the recession in 2008, many people are so happy (or relieved) to receive and offer that they’ll be tempted to sign it on the spot without taking a closer look at the details. That could be a mistake.

Those details include the terms that will become your contract of employment. In all but exceptional cases they will be enforceable, and can later be relied upon by either party from a legal prospective. And make no mistake – a vast majority of written employment offers are drafted by your prospective employer with terms that are much more favourable to them, and are designed to limit liability in the future. Beware, should the job not work out for any reason – you may find yourself with little or no recourse down the road.

One of the most common terms which seems to find its way increasingly into job offers is a clause dealing with future termination of employment, without cause. The Supreme Court of Canada has commented on the bargaining relationship between prospective employees and future employers in the following terms:

The terms of the employment contract rarely result from an exercise of free bargaining power in the way that the paradigm commercial exchange between two traders does. Individual employees on the whole lack both the bargaining power and the information necessary to achieve more favourable contract provisions than those offered by the employer, particularly with regard to tenure.

 

And so, many employers today seek to introduce a term into the offer of employment which is designed to limit their liability in the event of a future termination of employment, even without cause, to the bare minimum standards prescribed by the employment or labour standards legislation in a particular province.

Of course, when they’ve just received that job offer they were hoping for, very few prospective employees focus upon this term which, down the road, may turn out to have a significant and negative impact upon their lives. In fairness, as observed by the Supreme Court of Canada, many of these prospective employees do not have the bargaining power to negotiate or alter such a provision anyway and, as such, are left to assume the risk associated with a future event which may, or may not, crystalize someday.

The same Supreme Court of Canada has provided employers, who approach the issue squarely and fairly, with the latitude to circumscribe their future liability for a termination without cause by invoking the minimum provincial standards, when it commented:

Absent considerations of unconscionability and employer can readily make contracts with his or her employees which referentially incorporate the minimum notice period set out in the Act or otherwise take into account later changes to the Act or to the employee’s notice entitlement under the Act. Such contractual notice provisions would be sufficient to displace the presumption that the contract is terminable without cause only on reasonable notice.

 

The point of this article is simple – prospective employees beware. Read the terms and conditions associated with an offer of employment carefully. Consider obtaining employment legal advice. Most importantly, if you have some degree of bargaining power in the burgeoning relationship, take the opportunity to remove such aggressive terms and conditions of employment or to negotiate more balanced terms. Unfortunately, far too many people simply accept the offer placed in front of them only to regret their actions subsequently, even years later.

It is far more difficult to find “loopholes” or arguments to circumvent written employment contracts down the road, than to attempt to deal with them, head on, at the outset of the relationship.

Best of luck!

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Norman Grosman tackles your employment law dilemmas regularly on Workopolis. More information about him and his legal services can be found on his website grosman.com


Category: Employment Law,