Tips for the Employee
As an employment contract sets out the terms for perhaps one of your most important contractual relationships, it is only prudent to approach it in a cautious manner. What follows is a list of some important tips for negotiating your agreement. It is, by no means, an exhaustive list.
1. Seek specialized legal assistance. Do not wait until the form of the agreement has essentially been finalized. It will generally be too late at that time to make any substantial revisions to the agreement.
2. Finalize the form of the agreement before you accept the offer of employment. Once you have accepted the offer or commenced work, you risk losing your bargaining position. (It also brings the validity of the contract into question.)
3. Consider whether you want to specify your duties and responsibilities and if so, whether you want to preclude significant changes to same.
4. If the employer is requiring compliance with all company policies and procedures (ie. personnel manual), review those policies and procedures before entering into the agreement to determine whether you are prepared to be bound by them. There can be lots of surprises in those types of documents.
5. Consider whether you are prepared to be relocated by the Company. Depending on your circumstances, you may want to try and preclude relocation outside of a certain geographic area.
6. The agreement should specify the particulars of commission plans, variable incentive pay or bonus plans, benefits, stock option plans, and pension and RRSP matching plans. Too often these types of compensation issues are left unstated or to be determined at some later date. Avoid relying upon ?side deals? that never get put into writing.
7. If at all possible, avoid any non-competition or non-solicitation covenants that extend beyond the termination of your employment.
8. Do your best to avoid provisions for termination without cause that provide only minimum statutory termination or severance pay. Almost as problematic can be a provision that locks you into a maximum amount of payment in lieu of notice upon termination, (even though it may be greater than the statutory provisions). Unless the fixed amount of the payment in lieu of notice is very substantial, these types of maximum notice provisions can sometimes cause considerable hardship after long service with an employer. If it is necessary to address this issue in the agreement, it will generally be preferable to seek a high minimum amount of notice with a graduated scale up over time.
There is lots more to say on this subject and generally it is advisable to seek professional assistance.
Dated: May 2003