Hashing out the terms and conditions of the contract

Employment contract negotiations favour job seekers: Hawryliw

Historically low jobless rates and an extremely mobile workforce make for an attractive market for skilled employees considering a career change, Barrie employment lawyer Scott Hawryliw tells AdvocateDaily.com.

Hawryliw, founder of SRH Litigation, says the current climate puts prospective employees in a stronger bargaining position when negotiating an employment contract.

“The big takeaway here is having the leverage to ask for — and get — really great terms in an employment agreement,” he says.

“The current job market is very pro skilled employees. Depending on the power balance in a supply and demand sense, when employers and employees negotiate, usually one has a better bargaining position, and may be able to use that leverage to negotiate terms that are more favourable,” says Hawryliw, who advises clients in such discussions.

Statistics Canada figures show the Canadian unemployment rate reached a 40-year low in November. While a survey done by The Nielsen Company for Ceridian, a global human capital management firm, indicates that nearly 75 per cent of respondents were either looking for work or would consider leaving their current position if approached about an attractive opportunity.

Hawryliw says this has created a climate where prospective employees can negotiate such things as a higher salary, defined bonus structure, and favourable termination entitlements.

“You stay away from Employment Standards Act minimum entitlements on termination that in the opposite scenario the employer would be pushing on employees,” he says.

“You can even negotiate such things as getting defined bonus entitlements written in the contract that you will get one based on a specific formula as opposed to it not being written, giving the employer the discretionary power to pay you whatever bonus amount they feel like — or none at all.”

Hawryliw says attracting new employees often occurs formally through LinkedIn, recruiters, or the employer. It also often happens in informal settings.

“You meet someone at a golf tournament who says, ‘We could use someone like you,’ and all of a sudden you’re setting up a lunch meeting where they’re making a bunch of promises to get you to leave a job you’re perfectly happy in,” he says.

Hawryliw says the level of inducement could give a new employee leverage in the event of termination. For example, someone who leaves a company after 10 years to take another job only to be let go after a year, could argue that their termination entitlement should be based on 11 years of seniority.

“One important thing to keep in mind is what you are willing to do as an employer to induce these individuals to leave where they are and come work for you,” he says. “You’ve got to balance selling your workplace against enticing them with a whole bunch of promises to work for you and then getting stuck with the seniority from their old job.”

Hawryliw says employers have typically used two methods to retain employees and avoid the need for recruitment — the carrot and the stick.

The former involves treating them with respect, appreciating their contributions in a tangible way, and investing in their development and future.

“Employees will leave for all kinds of reasons, but a big one is that they don’t feel their contributions are respected and they don’t really see any future where they are,” he says.

“Obviously money is a consideration, but it’s not necessarily just that. People do leave positions where they’re compensated well, but they don’t feel appreciated.”

Some employers will attempt to discourage employees from leaving by including such things as non-compete provisions in employment contracts.

“I’ve had people say, ‘I want to make a move but I’ve got a non-compete and non-solicit clauses in my contract, and I’m a little nervous that if I do make a move, all hell is going to break loose,” Hawryliw says.

“In many cases, it is not going to hold up in court. This is by no means a blanket statement, but non-competes are tough to enforce and rightfully so.

“What you’re asking the court to do is tell someone they can’t work and be a productive member of society for a certain amount of time. Judges are not keen on enforcing non-competes where it can’t be justified as being necessary.”

He says such contract clauses will more than likely send up “red flags” with prospective employees, and in the current job market may prove counterproductive in attracting top-notch talent.

“An employment agreement, like any contract, can be whatever is agreed to by the parties. The only real exception to that in an employment law context is that if it’s lower than what is set out in the ESA, it’s going to be void. But anything better than that is fair game,” Hawryliw says.

“So, if an employee is able to negotiate a good deal, then all the power to them. Market leverage is going to allow them to do that,” he says.

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