Most employees sign an employment agreement when they start a new job, file it away, and never look at it again. When the employment relationship ends, however, that document is the most important one governing how your relationship will end.
An employment contract does more than set out pay and job duties. It defines the rights and obligations of both parties when the employment ends, including how much notice must be given, what happens to benefits, and whether bonuses or vacation pay remain payable. Failing to comply with the agreement, particularly regarding notice, can result in financial and legal consequences.
What “Notice” Means
Under Ontario’s Employment Standards Act, 2000 (ESA), both employees and employers have obligations when ending employment. “Notice” refers to the amount of advance warning that one party must give before the relationship ends. Most employment contracts specify how much notice an employee must provide when resigning, commonly two weeks, but sometimes longer for senior or specialized roles. Employers are likewise required to provide notice, or pay in lieu, when terminating the employment relationship.
Why Compliance Matters
Even after a challenging workplace experience, employees are expected to resign in accordance with their employment contracts. Resigning without providing proper notice may appear harmless, but can lead to:
- Loss of income or benefits – Employers may withhold unpaid bonuses or other discretionary income if the employment agreement is not honoured.
- Breach of contract claims – An employer may pursue damages if an employee’s early departure causes financial loss.
- Reputation concerns – How an employee exits a workplace can influence references and future job prospects. It could also hurt relationships with clients and colleagues.
- In every situation, the key issue is whether both parties followed the terms of the employment contract and whether that contract complies with Ontario law.
How Employees Can Protect Themselves
Before resigning or signing off on a termination package, employees should take several practical steps:
- Review the contract carefully – Identify clauses dealing with resignation notice, termination pay, and bonus eligibility.
- Do not assume the contract is valid – Many termination clauses have been struck down in Ontario for failing to comply with the ESA.
- Seek legal advice early – Consulting an employment lawyer before taking action can help avoid financial loss or inadvertent breach.
- Provide written notice- A concise, professional resignation letter or email establishes a clear record and reduces the potential for dispute.
An employment agreement is not a formality; it is a roadmap for how to start and end employment correctly. Following its terms and providing proper notice protects income, benefits, and your professional reputation.
If an employer fails to meet its contractual or statutory obligations, or if the validity of the contract is uncertain, obtaining legal advice can help clarify entitlements and options before taking the next step.
Contact Our Team Today
At Greenwood Law, we help employees understand their contracts and make informed decisions about resignations, terminations, and workplace transitions. Whether you received a termination package or are planning to leave your job, we can review your agreement and ensure your rights are protected.
