To safely review an employment contract before signing in Newfoundland and Labrador, you must carefully read the termination and non-compete clauses. Hiring a local employment lawyer to review the contract and highlight dangerous terms generally costs between $300 and $750 CAD.
Receiving a job offer in St. John’s, Corner Brook, or Conception Bay South is an exciting moment. When the human resources department hands you a lengthy employment contract, the temptation is usually to quickly flip to the last page and sign it immediately so you can secure the job. However, standard form contracts are drafted by corporate lawyers whose sole job is to protect the company, not you. Signing a contract blindly can severely limit your rights, restrict your future career options, and strip you of thousands of dollars in severance pay if you are ever let go. 📈
Understanding how to review an employment contract before signing is one of the most important professional skills you can develop. In Newfoundland and Labrador, the Labour Standards Act provides only a basic minimum of protection. A well-drafted contract can legally strip away your more generous “common law” rights, leaving you with barely any compensation if the company downsizes. This step-by-step guide will teach you exactly what clauses to look for and how to protect your career. 📍
Step-by-Step Process for Reviewing Your Employment Contract
Never sign an employment contract in the interview room. Always ask to take the document home for a day or two to read it in a quiet environment. 📑
Step 1: Check the Basic Compensation and Duties
Start with the obvious details. Ensure that your base salary, hourly wage, expected working hours, and job title perfectly match what was discussed during your interview. If the employer verbally promised you a yearly bonus, extra vacation time, or a remote work arrangement, it absolutely must be written into the contract. Verbal promises are incredibly difficult to enforce in the Supreme Court of Newfoundland and Labrador. 💵
Step 2: Scrutinize the Termination Clause
This is the most critical section of the entire document. Under common law in Canada, an unfairly fired employee could receive up to 24 months of severance pay. However, employers often insert a “Termination Without Cause” clause that limits your severance to the absolute minimum required by the Labour Standards Act (which caps out at just a few weeks of pay). If you see a clause trying to limit your notice period, highlight it immediately. 📝
Step 3: Look for Restrictive Covenants
Be highly suspicious of “Non-Compete” and “Non-Solicitation” clauses. A non-compete clause attempts to ban you from working for a competitor in Newfoundland and Labrador for a specific period (e.g., 12 months) after you leave. A non-solicitation clause stops you from poaching their clients or employees. While non-competes are notoriously hard for employers to enforce in Canadian courts, just having it in your contract can scare away future employers. 🚨
Step 4: Consult with an Employment Lawyer
If you are being offered a senior management position, a highly specialized role, or a job that requires you to relocate, you should never sign without professional advice. Book a consultation with a local employment lawyer. They will translate the dense legal jargon, tell you exactly what you are giving up, and even suggest counter-offers to negotiate better severance protections. 🤝
How Much Does it Cost in Newfoundland and Labrador?
Investing in a contract review upfront can save you tens of thousands of dollars in lost severance pay later in your career. Below are the typical costs for legal review. 💰
| Legal Service / Action | Estimated Cost (CAD) |
|---|---|
| Standard Contract Review & Advice | $300 – $750 |
| Lawyer Hourly Rate (For Negotiations) | $200 – $450 / hour |
| Executive Contract Negotiation Package | $1,000 – $2,500+ |
| Filing Labour Standards Inquiry | Free |
- Return on Investment: If a lawyer helps you strike out a bad termination clause, you could jump from receiving 2 weeks of statutory severance to 6 months of common law severance if you are ever terminated without cause.
- Flat Fees: Many law firms in St. John’s offer a flat-fee service for reviewing standard, entry-level employment contracts, which includes a one-hour meeting to explain the risks.
How Long Does the Process Take?
You have the right to take a reasonable amount of time to review a legal document. Usually, asking an employer for 2 to 4 days to review the contract is considered standard and professional. If you hire a lawyer, they can usually turn around a contract review within 24 to 48 hours. If you decide to push back and negotiate terms, the back-and-forth emails between you and the employer may extend the hiring process by 1 to 2 weeks. ⏱
Frequently Asked Questions (FAQ)
Can the employer withdraw the offer if I try to negotiate?
Yes, legally, an employer can withdraw a job offer at any time before it is signed. However, professional companies rarely withdraw an offer just because a candidate politely asks for clarification or requests a minor change to a termination clause.
What is a probationary period?
A probationary period is a clause allowing the employer to fire you within the first few months (usually 3 to 6 months) without providing any severance pay or notice. You should ensure this timeframe matches what was discussed in your interview.
Are non-compete clauses actually enforceable in NL?
In many cases, no. Canadian courts generally view non-compete clauses as overly restrictive to a person’s ability to earn a living. They are usually only enforced if you are a high-level executive, the geographic restriction is very small, and the time limit is short.
What if my contract says I get ‘zero’ severance?
A contract clause that attempts to give you less than the minimum standards outlined in the Newfoundland and Labrador Labour Standards Act is completely illegal and legally void. If a judge sees this, they will usually throw out the clause and award you full common law severance.
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