How to Write Legally Compliant Employment Contracts in Canada

Avoid Legal Pitfalls with Properly Drafted Contracts That Work Across Provinces

Employment contracts are the legal backbone of every workplace relationship — yet most small and mid-sized businesses in Canada continue to use outdated, generic, or even verbal agreements. These shortcuts can be extremely costly.

In Canada, courts have struck down employment contracts that fail to meet minimum ESA standards, rely on vague language, or conflict with common law rights. A single unenforceable clause can leave employers on the hook for months of severance, legal fees, and reputational damage.

At HireEase, we believe in prevention over litigation. This article explains what makes an employment contract enforceable in Canada — and how to draft one that stands up in court.

Why Employment Contracts Matter More Than Ever

Many employers assume a signed offer letter or email agreement is enough. It’s not. Without a legally compliant, written contract, courts default to common law protections — which can result in significantly more generous termination entitlements for employees.

A proper employment contract will:

• Define terms clearly and reduce misinterpretations

• Limit liability with enforceable termination clauses

• Outline probation terms in line with ESA standards

• Protect intellectual property and confidential information

• Set clear expectations around role, pay, benefits, and work location

• Help resolve disputes before they escalate

Top 5 Mistakes in Canadian Employment Contracts

1. Unenforceable Termination Clauses Courts have repeatedly invalidated termination clauses that provide less than what the Employment Standards Act (ESA) requires — even if it’s accidental. If a clause is unenforceable, the employer must pay common law notice, which could mean months (or even years) of compensation.

2. Lack of Clear Probation Language In many provinces, a probation period is only enforceable if explicitly stated and compliant with the ESA (e.g., 3 months maximum in Ontario). Simply writing “90 days probation” without details won't cut it.

3. Failure to Update Contracts as Laws Change If your contracts are based on templates older than 2020, they may be vulnerable to court challenge. Termination clause enforceability, electronic signatures, and remote work policies have all evolved in recent years.

4. Using a One-Size-Fits-All Template Across Provinces Employment standards vary by jurisdiction. For example:

   • Ontario limits probation to 3 months.

   • Saskatchewan defines probation as 13 weeks, not “three months.”

   • Alberta allows up to 90 days, but ESA interpretation matters.

5. Confusing Offer Letters with Full Contracts A basic offer letter isn’t enough. It should always be accompanied by a comprehensive contract that addresses employment terms, termination rights, and compliance with the appropriate ESA.

What Every Canadian Employment Contract Should Include

To be enforceable and effective, your employment contract should clearly outline:

Section	Key Elements
Job Title & Duties	Clearly define the role, responsibilities, and reporting structure
Compensation & Benefits	Include salary, bonuses, benefits, vacation, and overtime eligibility
Hours & Location of Work	Specify regular hours and where the work will be performed (remote/in-office)
Probation Period	Clearly defined and compliant with provincial limits
Termination Clauses	Must meet or exceed ESA minimums to be enforceable
Confidentiality & IP Clauses	Protect sensitive business information and ownership of work
Non-Solicitation	If used, ensure they are reasonable and time-limited
Changes to Employment Terms	Include language allowing for reasonable changes with notice
Governing Law	Identify the province’s employment standards regime that applies

Why Contracts Get Struck Down in Court

Canadian courts favor employees when interpreting ambiguous or unfair terms. Even well-meaning employers can lose if their contracts:

• Contradict ESA minimums

• Use outdated legal language

• Try to contract out of statutory rights

• Were not signed before the employee’s start date

• Include blanket statements like “you waive your rights” or “termination without cause with no notice”

A recent Ontario case (e.g., Waksdale v. Swegon North America Inc.) shows how even a single invalid clause can nullify an otherwise well-written contract — exposing employers to thousands in common law entitlements.

How HireEase Helps You Stay Compliant and Protected

HireEase simplifies employment compliance for Canadian businesses by offering:

• Lawyer-drafted employment contracts, updated with the latest case law and ESA changes

• Templates tailored by province, including special terms for Ontario, Alberta, BC, and more

• Built-in probation and termination clauses that reflect enforceability standard

• Support documents like offer letters, onboarding forms, and policy templates

Whether you’re hiring your first employee or scaling your team across provinces, HireEase helps you avoid costly legal mistakes and focus on growth.

Ready to Create Compliant Contracts That Work?

Don’t let vague language or outdated templates cost your business thousands. Explore HireEase’s employment contract packages today to protect your company and support your people — from offer to onboarding.

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