Do I need a written employment agreement in Canada?

A written agreement is not legally required, but without one the employer is exposed to full common-law reasonable-notice liability on termination. Every serious Canadian employer uses a signed written agreement to cap notice and to set out confidentiality and IP terms.

How much notice of termination is an employee entitled to?

Statutory notice depends on the province — in Ontario under section 54 of the ESA it is one week per year of service up to eight weeks. Common-law reasonable notice can be much higher (often one month per year up to about 24 months) and applies where the contract’s termination clause is unenforceable.

Are non-compete clauses enforceable in Canada?

In Ontario they are prohibited in new employment agreements except for executives or in the context of a sale of a business (ESA s. 67.2). In other provinces they are enforceable only if reasonable in time, geography and scope, and necessary to protect a legitimate proprietary interest.

Does the contract have to be signed before the start date?

Yes. If the employee begins work before signing, starting work may have already been consideration for an earlier oral arrangement, and imposing new written terms afterwards may require fresh consideration. Best practice is to have the agreement signed before the first day of work.

Can the contract be changed later?

Material changes generally require the employee’s agreement and fresh consideration — anything less may be a constructive dismissal under the principle in Potter v New Brunswick Legal Aid Services Commission, 2015 SCC 10. A well-drafted contract includes an amendment clause and reserves reasonable discretion over policies.

What if the employee works from home or out of province?

The employment standards act of the province where the work is performed typically applies. Remote workers may also trigger provincial tax, workers’ compensation and occupational health and safety registration, so the agreement should identify the primary work location and require notice of any relocation.

Is this template suitable for Quebec?

Quebec employment law differs materially, with mandatory good-faith obligations, the Act respecting labour standards (CQLR c. N-1.1), and Charter of the French Language requirements on the language of the contract. The template should be localized by a Quebec lawyer before use there.

Can I use it for contractors or fixed-term employees?

No. This template is drafted for indefinite-term employees. Independent-contractor and fixed-term arrangements are different relationships with distinct tax, statutory and termination consequences and require their own contract templates.

CareerCanada

Employment Agreement Template

An employment agreement sets the full legal relationship between a Canadian employer and employee — from duties and compensation through to termination, confidentiality and intellectual property. Our free template is drafted to the employment standards legislation of the common-law provinces and can be tailored for Ontario, British Columbia, Alberta and federally regulated roles.

Create Your Employment Agreement (Full-Time)

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EMPLOYMENT AGREEMENT

Full-time Employment · Province Of Ontario, Canada

EMPLOYER

Maple Leaf Technologies Inc.

123 Bay Street, Suite 4500, Toronto, ON M5J 2T3

By: Jennifer Wong, Director of Human Resources

EMPLOYEE

Sarah J. Thompson

456 Queen Street West, Apt 12, Toronto, ON M5V 2A5

By: sarah.thompson@email.com

Senior Software Developer — Engineering

Start: April 1, 2026 · Annual Salary: 95,000.00 CAD

This Employment Agreement (this "Agreement") is entered into as of April 1, 2026 by and between Maple Leaf Technologies Inc. (the "Employer") and Sarah J. Thompson (the "Employee"). The Employer agrees to employ the Employee, and the Employee agrees to accept employment, on the terms and conditions set forth below.

POSITION AND DUTIES

The Employer hereby employs the Employee in the position of Senior Software Developer in the Engineering department, reporting to VP of Engineering. The Employee shall faithfully and diligently perform all duties and responsibilities associated with this position and such other duties as may be reasonably assigned by the Employer from time to time. The primary work location shall be: 123 Bay Street, Suite 4500, Toronto, ON. This Agreement is subject to the minimum standards prescribed by the Employment Standards Act of the Province of Ontario, and nothing herein shall be interpreted as contracting below those standards.

COMPENSATION

The Employee shall receive a gross annual salary of 95,000.00 CAD, payable on a bi-weekly basis, subject to all applicable statutory deductions including Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, and federal and provincial income tax withholdings. The Employer shall provide the Employee with a pay statement for each pay period in accordance with the Employment Standards Act of Ontario. Compensation will be reviewed periodically in accordance with company policy.

HOURS OF WORK

The Employee's standard hours of work shall be 40 hours per week, generally scheduled Monday to Friday. Overtime hours, if any, shall be compensated in accordance with the overtime provisions of the Employment Standards Act of Ontario. The Employer reserves the right to reasonably modify work schedules with appropriate notice, subject to applicable legislative requirements.

PROBATIONARY PERIOD

The Employee shall be subject to a probationary period of 3 months commencing on the start date of employment. During the probationary period, the Employer may assess the Employee's performance, skills, and suitability for the position. The Employer may terminate this Agreement during the probationary period with such notice as is required by the applicable Employment Standards Act. Upon successful completion of the probationary period, the Employee shall be confirmed in the position. Performance reviews during probation shall be conducted as follows: At 45 days and 90 days.

VACATION AND LEAVE

The Employee shall be entitled to 3 weeks of paid vacation per calendar year, accruing from the start date, to be taken at times mutually agreed upon with reasonable notice. Vacation pay shall be calculated at a rate of not less than 6% of the Employee's gross wages earned in the applicable entitlement year, in accordance with the Employment Standards Act of Ontario. The Employee shall also be entitled to 10 paid sick/personal days per year. Unused sick days shall not be carried over or paid out unless otherwise required by applicable legislation. Note: certain provinces have introduced mandatory paid sick leave (e.g., British Columbia: 5 paid days under the Workers Compensation Act amendments).

BENEFITS

The Employee shall be eligible to participate in the Employer's enhanced group benefits plan, subject to the plan's terms, conditions, and eligibility requirements. Benefits coverage shall commence after a waiting period of 90 days from the start date. The Employer reserves the right to modify, amend, or discontinue any benefit plan at its discretion, subject to applicable legal requirements and obligations to provide reasonable notice of material changes. The benefits plan does not form a term of this Agreement and may be amended without creating an obligation to compensate the Employee for any reduction in benefits.

TERMINATION

(a) Termination Without Cause by the Employer: The Employer may terminate this Agreement at any time without cause by providing the Employee with 8 weeks' written notice (or pay in lieu thereof), which shall not be less than the minimum notice required under the Employment Standards Act of Ontario for the Employee's length of service. In Ontario, where the employer has an annual payroll of $2.5M or more, severance pay under s. 64 of the ESA may also be payable for employees with 5 or more years of service.

(b) Termination for Just Cause: The Employer may terminate this Agreement immediately and without notice or pay in lieu for just cause, including but not limited to: wilful misconduct, material breach of this Agreement, fraud, dishonesty, theft, insubordination, or conduct materially detrimental to the Employer's reputation or interests.

(c) Resignation by the Employee: The Employee may resign by providing the Employer with 2 weeks' written notice. The Employer may, at its discretion, waive the notice period and pay out any remaining notice.

(d) Return of Property: Upon termination for any reason, the Employee shall immediately return all Employer property, devices, access credentials, confidential documents, and materials.

CONFIDENTIALITY AND INTELLECTUAL PROPERTY

Confidentiality: During the term of employment and at all times thereafter, the Employee shall hold in strict confidence and not disclose, publish, or otherwise reveal to any third party any Confidential Information of the Employer, including but not limited to trade secrets, business strategies, client lists, financial information, technical data, and any information not generally available to the public. The Employee acknowledges that any such disclosure would cause irreparable harm to the Employer. This obligation is governed by, and subject to, the applicable provisions of the Personal Information Protection and Electronic Documents Act (PIPEDA), S.C. 2000, c. 5, and applicable provincial privacy legislation.

Intellectual Property: All work product, inventions, improvements, and intellectual property created by the Employee in the course of employment shall vest in and belong exclusively to the Employer. The Employee agrees to execute any documents necessary to perfect the Employer's ownership of such intellectual property.

Non-Competition: The parties acknowledge that, pursuant to the Employment Standards Act, 2000 (Ontario) (as amended by the Working for Workers Act, 2021, S.O. 2021, c. 34), non-compete clauses are void and unenforceable for most employees in Ontario. Similar protections may apply in other provinces. This Agreement does not include a non-compete clause.

WORKPLACE CONDUCT AND HUMAN RIGHTS

The Employee shall comply with all Employer policies, including the Employer's workplace conduct, anti-harassment, and health and safety policies. The Employer is committed to providing a workplace free from discrimination and harassment in accordance with the applicable provincial human rights legislation (including the Human Rights Code, R.S.O. 1990, c. H.19 in Ontario and equivalent provincial codes) and the Canadian Human Rights Act, R.S.C. 1985, c. H-6. Violations of these policies may result in disciplinary action up to and including termination for just cause.

10.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein, including the applicable Employment Standards Act. Nothing in this Agreement shall be interpreted as limiting or contracting out of any minimum employment standard prescribed by applicable legislation. In the event of any conflict between this Agreement and any applicable employment standard, the applicable minimum standard shall prevail.

11.

GENERAL PROVISIONS

Entire Agreement: This Agreement constitutes the entire agreement between the parties with respect to the Employee's employment and supersedes all prior representations, negotiations, and agreements. Amendment: No amendment shall be valid unless in writing and signed by both parties. Severability: If any provision is found to be invalid or unenforceable, the remaining provisions shall remain in full force and effect. Electronic Execution: This Agreement may be executed electronically. Electronic signatures are valid and binding under the applicable provincial electronic commerce legislation. Counterparts: This Agreement may be executed in counterparts, each of which shall constitute an original.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date first written above.

EMPLOYER

Jennifer Wong

Director of Human Resources

Maple Leaf Technologies Inc.

Date: ____________________

EMPLOYEE

Sarah J. Thompson

Date: ____________________

What Is an Employment Agreement?

An employment agreement is the written contract that governs the working relationship between an employer and an individual employee. It covers compensation, hours, duties, confidentiality, intellectual property ownership, restrictive covenants and — critically in Canada — how the employment can be ended. A well-drafted agreement displaces the common-law presumption of reasonable notice and provides certainty for both sides.

Canadian employment agreements are governed primarily by the employment standards act of the province of work, such as the Employment Standards Act, 2000, S.O. 2000, c. 41 in Ontario or the Employment Standards Act, R.S.B.C. 1996, c. 113 in British Columbia. Employees of banks, airlines, telecoms and other federally regulated industries are instead covered by the Canada Labour Code, R.S.C. 1985, c. L-2. Every written agreement must meet or exceed the minimum standards in the applicable statute.

The leading case of Bardal v Globe & Mail Ltd. (1960), 24 DLR (2d) 140 (Ont HC) established the factors courts weigh when awarding reasonable notice at common law: the character of the employment, length of service, age of the employee, and availability of similar employment. A compliant employment agreement is the main way an employer limits exposure to those common-law awards, which can reach twenty-four months of notice in senior cases.

What's Covered in This Template

Our Canadian employment agreement template covers every term a court will look for when assessing enforceability.

Parties and Position

Full legal names of employer and employee, role title, reporting line and start date.

Duties and Standards

A description of duties, expectations of loyalty and full-time attention, and compliance with policies.

Compensation and Benefits

Annual salary or hourly rate, pay frequency, bonus eligibility, benefits and RRSP or pension contributions.

Hours of Work and Overtime

Standard hours, overtime eligibility and averaging arrangements consistent with the applicable ESA.

Vacation and Leaves

Statutory vacation entitlement plus any employer-provided uplift and coordination with statutory leaves.

Termination by Employer

Notice and pay in lieu on termination without cause, drafted to meet or exceed ESA minimums and severance obligations.

Termination by Employee

Required notice of resignation and return of employer property on departure.

Confidentiality and IP

Protection of confidential information, assignment of intellectual property and moral-rights waivers.

Restrictive Covenants

Non-solicitation of clients and employees, and (where permitted) narrowly drafted non-competition language.

Governing Law and Entire Agreement

Choice of provincial law, severability and entire-agreement language replacing any prior understandings.

How to Create an Employment Agreement

Follow these steps to produce a compliant Canadian employment agreement.

1
Confirm the Province and Category
Identify the province of work and whether the employer is provincially or federally regulated, and whether the role is full-time, fixed-term or part-time.
2
Set Compensation and Benefits
Choose salary or hourly rate in CAD, bonus rules, vacation, benefits and eligibility dates.
3
Draft the Termination Clause
Set a termination clause that expressly incorporates ESA minimums, deals with "just cause" in line with the statutory wilful-misconduct standard, and survives Waksdale scrutiny.
4
Add Restrictive Covenants Carefully
Include confidentiality, IP assignment and non-solicitation clauses; avoid non-competes except for executives or in sale-of-business contexts in Ontario.
5
Sign Before the Start Date
Have the employee sign the agreement before the first day of work so that starting work is fresh consideration for the terms.

Legal Considerations

Canadian employment contracts must comply with statutory minimums, common-law rules on termination and — in Ontario — specific restrictions on non-competition clauses.

This template is for informational purposes only and does not constitute legal advice. Consult a qualified lawyer in your province for advice specific to your situation.

Reviewed for Canadian law

Statutory Minimums Under Provincial ESAs

Section 54 of the Employment Standards Act, 2000, S.O. 2000, c. 41 sets termination notice at one week per year of service up to eight weeks, and section 57 permits pay in lieu. Section 64 requires statutory severance where the employer has a $2.5 million payroll and the employee has five or more years of service. British Columbia, Alberta and other provinces have similar but distinct schemes; every written agreement must meet or exceed the applicable provincial standard.

Common-Law Reasonable Notice and Waksdale

Absent an enforceable termination clause, employees are entitled to reasonable notice at common law, measured by the Bardal factors. Following Waksdale v Swegon North America Inc., 2020 ONCA 391, a single defective sentence in the termination language — most commonly a "for cause" clause that falls below the ESA wilful-misconduct standard in O. Reg. 288/01 s. 2(1)(3) — can invalidate the entire termination provision and revive common-law notice.

Non-Competition and Non-Solicitation Covenants

For agreements entered into on or after October 25, 2021, section 67.2 of the Ontario ESA prohibits non-compete clauses except for executives or on the sale of a business. Non-solicitation and confidentiality covenants remain enforceable across Canada provided they are reasonable in scope, duration and geography and protect a legitimate proprietary interest, applying the test in Shafron v KRG Insurance Brokers (Western) Inc., 2009 SCC 6.

Federally Regulated Employees

For employees in industries governed by the Canada Labour Code, R.S.C. 1985, c. L-2 (banks, telecoms, interprovincial transport, federal Crown corporations), termination is subject to the unjust-dismissal regime in Part III of the Code. Employment agreements for these workers must account for that regime, the group-termination rules, and updated federal minimums that came into force in 2019 and 2024.

Frequently Asked Questions

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