Employment Contracts in Nova Scotia

Have you been hired or promoted, and asked to sign an employment contract? 

Employment contracts in Nova Scotia (or, ‘employment agreements’) are one of the most important legal documents that a person can sign. It can affect many aspects of your daily life, both during your new job and even after you leave. An employment contract is also one of the most effective ways for an employer to clarify its obligations to its employees.

Nevertheless, when they are hired or promoted and asked to sign new employment contracts in Nova Scotia, most employees do not make a serious effort to understand what it contains and how it may affect their rights. And some employers do not bother implementing them. Our employment lawyers routinely assist people who have been offered a new job or a promotion to better understand the terms of proposed contracts of employment.

What are employment contracts in Nova Scotia?

Typically, an employment contract is a written document that contains information about the employee’s job, such as their position, responsibilities, compensation, hours of work, vacation entitlements, workplace policies, et cetera. It is a legally binding agreement between the employer and employee that will govern their working relationship.

Below, we address some of the most important (and often overlooked) clauses usually included in employment contracts.

Termination Clauses

This common part of an employment agreement often seeks to significantly limit the amount of notice or pay in lieu of notice (severance pay) that an employer owes the employee if they are terminated from their position without cause. 

Most employees sign agreements containing such clauses, without being fully informed about what rights they are giving up. A contract with an unfair termination clause can mean tens of thousands of dollars lost for an employee if their employment is terminated down the road.

Quite often, however, termination clauses are poorly written or simply illegal. This means that sometimes significant severance pay is still owed in the event of a termination, even if the contract appears to say otherwise. If you lose your job, it is important to have an experienced employment lawyer in Nova Scotia immediately examine the fine print in your contract and help you understand your rights.

Non-Competition Clauses

A non-competition clause is where an employer seeks to stop an employee from working for a competitor or from starting their own competing business, either while they are working for the employer or even after they are terminated or quit. Such clauses are common.

Generally, courts will presume that a non-competition clause is invalid. It is up to the employer to convince the court otherwise. Such clauses can be rather difficult to enforce, as they seek to make it nearly impossible for a former employee to find new work and earn a living. To be enforceable, the non-competition clause must be properly tailored to the employer’s legitimate interests. For example, a non-compete clause that prevents an employee from working in the same industry anywhere in the entire province would likely be viewed as unreasonably broad, and therefore not enforceable.

If there is concern about a non-competition clause in any employment contracts in Nova Scotia, you should contact our employment lawyers to ensure your rights after termination are maintained.

Changing the Terms of an Employment Contract

Generally, while employers are entitled to manage their workplaces and make reasonable changes, they cannot unilaterally alter someone’s fundamental terms of employment without proper notice. When that happens, it is called “constructive dismissal”. The affected employee may be owed severance pay if they decide not to accept the new terms.

Sometimes, an employment agreement may seek to allow the employer to make unilateral changes to the contract and preclude any claim for constructive dismissal. Such terms can often be easily negotiated.

Unclear Terms in Employment Contracts in Nova Scotia

Sometimes, a clause in an employment contract is truly unclear or ambiguous, which is to say, there may be more than one reasonable interpretation of what it means. Where this is the case, the courts will usually go with the interpretation that most favours the employee. This is a result of the unequal bargaining power that exists between the employer (who drafted the contract) and the employee (who must agree to it to get the job). This is called the contra proferentem principle of interpretation.

It is important for employers to ensure all clauses in a contract are clear, unambiguous and enforceable. An experienced employment lawyer can assist with that.

New Employment Contracts

When you are hired or promoted, or at any other time, if an employer asks you to sign a new employment agreement, you should have a legal expert thoroughly review it with you before signing. Most likely, you are being asked to give up some of your workplace rights. Also keep in mind that, if a new contract is signed during your employment, your employer must offer you something in return for your signature, such as a bonus, to make it enforceable.

The best time for an employee to call an employment lawyer is when you are starting a new job. Whether you are an employee or an employer, let us help you ensure your employment contract is a document that recognizes and respects your workplace rights, and that will not create legal problems for you down the road.  

Are you about to create or sign new employment contracts in Nova Scotia?

Contact us today to book a consultation with our employment lawyer, Daniel Wilband.  He can review your contracts for you. 

For more information on the written notice requirements in Nova Scotia, click here. While the Labour Standards Codes have these written requirements for notice, there are many factors at play not in the code, and that’s where the help of a knowledgeable employment lawyer comes in.

The above is provided for informational purposes only and does not constitute legal advice — contact a lawyer to discuss your personal circumstances and learn your options.

About the Author

This article was written by Daniel Willband, one of our employment lawyers. To learn more about Daniel, please visit our about us page. To learn more about our services in employment law, please visit our employment law page.

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