February 1, 2016
A well drafted and implemented written employment contract can be instrumental to both avoiding or resolving disputes both during the employment relationship and when it ends – saving the employer time and money in either case.
WRITTEN EMPLOYMENT CONTRACTS Every employer has an employment contract with every employee – even when there’s “nothing in writing”. The issue is often, however, ascertaining its terms. There are several benefits to a well-drafted and implemented written employment contract, the ultimate benefit being fewer disputes and a reduction in the associated time and cost to the employer.
Clarity. A well-drafted written employment contract that sets out all of the terms and does so clearly will help avoid disputes later. And since employment relationships are often intended to last a long time, and human memories are fallible, a written employment contract ensures all of the details and sometimes complicated arrangements are recorded.
Legislative Compliance. The employment standards legislation of some provinces requires a written document; for example, the NL Labour Standards Act requires an “employment statement” setting out terms and conditions of employment required by statute. Furthermore, while it’s not permissible to contract out of all requirements of employment-related legislation, it is possible to contract out of some; a written contract makes it far simpler to prove the employer did so.
“Legalese”. Unlike other “commercial” contracts, courts interpret employment contracts to protect employees. So they scrutinize employment contract terms closely, usually deciding any ambiguities against the employer’s interest. There are technicalities associated with many employment contract terms, and it’s important to get the “legalese” and wording right so they will meet the legal tests for a court to enforce them. Properly implementing the employment contract is just as important as getting the terms right. The employment terms must be set at the time of hiring/start of employment: an employer can’t unilaterally impose new employment conditions that fundamentally change the employment relationship during the employment unless it gives the employee prior notice or “consideration”: something of new value in exchange for the obligations in the contract.
TOP 12 EMPLOYMENT CONTRACT TERMS A standard form employment agreement is useful, but the employer should always review it and, if required, customize it to the circumstances. That said, there are some terms that just about every employment contract should include. Here are the top 12.
Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper Labour & Employment Team to discuss this topic or any other legal issue.
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