Starting a new job is exciting, but before you sign on the dotted line, it’s crucial to know exactly what you’re agreeing to. We’ve seen firsthand how one poorly worded clause in an employment contract can impact your rights, your pay, or even your ability to work elsewhere in the future.
This article highlights the top red flags we routinely spot in Canadian employment contracts and what you should do if you see them.
An employment contract is a legally binding agreement and a formality that defines your rights, responsibilities, and future options.
Too often, employees assume it’s a standard document and sign without a second thought. But contracts can limit your ability to make legal claims, restrict your career options, or reduce your entitlements if things go sideways.
The Top 10 Red Flags in Employment Contracts
1. Vague Job Responsibilities
If your contract only broadly describes your role, your employer could later expand your duties—without increasing your pay.
For example, a contracts that simply say “other duties as assigned,” which led to our client being assigned tasks far outside their original position. Always ask for a clear, detailed job description.
2. Non-Compete Clauses
Non-compete clauses may prevent you from working in your field after leaving your job.
While these are often unenforceable in Canada, their presence can still be intimidating and may even discourage you from pursuing certain opportunities.
3. No Clear Termination Clause
If you feel safe, let the person know that their behaviour is unwelcome and must stop. Setting boundaries early can sometimes resolve the issue before it escalates.
4. Overly Broad Non-Disclosure Agreements (NDAs)
NDAs that prohibit you from discussing anything about your work can silence legitimate concerns or prevent you from seeking advice. Watch for NDAs with no clear time limit or that cover information that isn’t truly confidential.
5. Probation Period Longer Than 3 Months
In Ontario, the standard probation period is three months. Anything longer can delay your access to job protections and benefits.
6. Unpaid Trial or Training Periods
Any period where you’re expected to work without pay—unless you’re a true intern—may violate employment laws. All work should be compensated.
7. Intellectual Property Clauses That Go Too Far
Some contracts claim ownership over any intellectual property you create—even outside of work hours.
8. Contract Says “You Are an Independent Contractor”
Misclassifying employees as independent contractors is a common tactic to avoid paying benefits, taxes, or severance.
If your contract labels you as a contractor but your work is controlled like an employee’s, you may be entitled to employee protections under Canadian law.
9. No Mention of Overtime or Vacation
Your contract should clearly state your entitlement to overtime, vacation, and sick days. Vague or missing language can leave you with less than the minimum required by law.
A contracts that, intentionally or not, left out these key details—leading to disputes down the road.
10. “Termination Without Cause” = Minimum ESA Entitlement Only
Many contracts try to limit your severance to the minimum required by the ESA. This is almost always a bad deal, as common law entitlements can be much higher.
What to Do If You Spot a Red Flag
Don’t rush into signing. Ask for time to review the contract, discuss your concerns with HR or the recruiter, and request changes in writing. Consulting a Canadian employment lawyer.
Why You Should Always Review Your Employment Contract
Many employees suffered real financial and career setbacks because they didn’t review their contracts closely enough.
Some people just got shocked to learn that a “standard” termination clause meant she was entitled to just eight weeks’ pay after years of loyal service.
Reviewing your contract isn’t just about avoiding disaster—it’s about peace of mind and protecting your future. A contract that protects only the employer isn’t fair. Take the time to protect yourself before you sign.
