What key terms should be in an employment agreement in Ontario?

A well-drafted employment agreement in Ontario should address the role and responsibilities, compensation (base salary, bonus, commission structure), benefits, vacation entitlement (at minimum, the Employment Standards Act, 2000 floor), and any equity or profit-sharing arrangements.

Equally important are the termination provisions. Ontario law gives employees minimum notice and, in some circumstances, severance pay under the Employment Standards Act, but the common law entitlement to "reasonable notice" can be substantially longer — sometimes many months more than the statutory minimum. A properly worded termination clause can limit the employer's obligation to the statutory minimum, but courts scrutinize these clauses carefully. A poorly worded or overbroad clause will be struck down, and the employer will owe common law notice on top of statutory obligations.

Non-solicitation and confidentiality provisions are also standard in many Ontario employment agreements. Non-competition clauses face strict scrutiny under Ontario law and are generally unenforceable in employment contracts, except in very narrow circumstances for senior executives.

Any employment agreement should be signed before the employee starts work or receives a written offer — consideration issues can arise if you ask someone to sign after they have already begun the job.