The Employment Contract in Ontario: Why They Matter

Every employment relationship in Ontario is governed by an agreement—whether written or implied. In unionized workplaces, this comes in the form of a collective agreement. In non-unionized settings, the employment contract may be written, verbal, or implied. Regardless of form, employment contracts carry legal weight—and understanding them is essential.

What Is an Employment Contract in Ontario?

An employment contract in Ontario is a legal agreement between an employer and an employee that outlines the terms of employment, including duties, pay, hours, and termination rights. Even without a written contract, employment laws still apply—but a clear agreement helps reduce risk and confusion.

Why Employment Contracts Matter

A well-drafted employment contract sets expectations and protects both parties. It defines key terms such as compensation, working hours, termination clauses, and continuing obligations like confidentiality. Without clear terms, the risk of disputes and misunderstandings increases.

• Clarity of Roles: Contracts clarify duties, hours, compensation, and responsibilities.
• Employee Entitlements: Vacation pay, sick leave, and benefits are usually outlined.
• Termination Terms: Written contracts specify notice periods and severance expectations.
• Continuing Obligations: Non-compete, non-solicit, and confidentiality clauses are often included.

If you need help reviewing, drafting, or negotiating an employment contract, speak with our employment contract lawyers today →

What Happens Without a Written Contract?

In the absence of a written contract, an implied agreement still exists—but it’s riskier. Terms may be unclear or based on past practice. For employers, this may create exposure to claims. For employees, entitlements may be more generous under common law, but they are also more uncertain.

Risks for Employers:

• No written notice provisions

• No enforceable restrictions post-employment

• Higher severance exposure

Risks for Employees:

• Unclear entitlements

• Lack of protection in disputes

• More difficult to prove terms of agreement

Unsure if your rights are protected without a written contract? Contact our legal team today →

Risks in a Poorly Drafted Contract

Even written contracts carry risks if they’re vague or one-sided. Common issues include:

• Unclear or unenforceable terms

• Non-compliance with Ontario employment standards

• Outdated language that doesn’t reflect recent legal changes

• Overly restrictive clauses that courts may strike down

Employment laws change regularly—contracts that haven’t been updated may be invalid.

Have your contract reviewed to reduce risk and avoid future disputes. Book a consultation →

How an Employment Lawyer Can Help

An employment contract lawyer helps ensure your contract is fair, compliant, and protective. We:

• Draft new contracts that reflect your needs and comply with Ontario law

• Review and revise existing employment agreements

• Identify and correct high-risk clauses

• Advise employers on enforceability and updates

• Support employees with contract negotiations or disputes

Whether you’re reviewing a severance package, preparing to hire, or revisiting your workplace policies, clear employment contracts are a smart investment in legal security.