An employment contract is a fundamental private agreement in which both employer and employee receive the terms of employment. It includes conditions relevant to employment in Canada, from responsibilities/duties to rights. Properly drafted, an agreement can ensure that the interests of the parties are protected.
With clarity of expectations about the working relationship and mutual understanding of the latter. It may also be used to set off legal parameters for resolving disputes, if any, arising in the due course of employment. Of course, the very first step towards creating a legally sound contract is to understand what this document is and why it is important.
Key Elements of a Canadian Employment Contract
Certain key components are required when drafting an employment contract that is legally valid in Canada. The typical components will include things like the title of the job, duties associated with it, compensation, hours worked, and conditions under which one will be working. Also, probation period, benefits, time for vacations, and termination clause should form part of the agreement.
By defining these features clearly, employers and employees can avoid misunderstandings and legal disputes. Each of these elements is required to follow the Canadian employment law, which varies depending on each province and territory. It is, thus, essential for an organization to understand the legal obligations that bind it within its province.
Including Provincial Employment Standards
Employment law in Canada is both a federal and provincial law, and the majority of the employees are under the authority of the province. What that means is each of the provinces provides a different set of employment standards governing minimum wage, hours of work, overtime, pay, and entitlement to leave.
When formulating an employment contract, it is very important that it be prepared in compliance with the particular province in which the employee will be employed. Failure to comply with the standards of employment means the rendering of the said contract void, in part, and may also render the employer liable to possible litigations.
Consulting a Lawyer
It would be quite wise to consult an employment lawyer when employers create an employment contract as the issues are pretty complex in employment laws of Canada. The lawyer can provide advice on a legal requirement of the contract and ensure that it sufficiently contains all those requirements.
They also assist in indenting conflict areas within the employment relationship and help in drafting clauses for the interest of the employer while still being fair to the employee. The intended use of obtaining such advice by an employer is to minimize future conflict and to avoid any possible disputes by ensuring their contracts of employment are up to date and are legally appropriate and binding when taken to a court of law for any reason.
The Significance of Clear Termination Clauses
A termination clause is among the most prominent aspects of an employment contract here in Canada. The conditions upon which an employee can get fired should be clearly spelled out herein, including periods of notice and severance pay. Canadian employees are entitled to a reasonable period of notice or pay in lieu of notice upon termination unless just cause is shown for such termination.
A well-crafted termination clause could limit the liability of the employer by stating what notice or severance the employee will receive upon termination. This must, however, be carefully worded to avoid falling foul of the provincial employment standards, which render such an agreement unenforceable.
Non-Compete and Confidentiality Agreements
Employers may wish to include in an employment contract either a non-compete or a confidentiality agreement. Such a clause may prohibit an employee from working for a competitor or disclosing the confidential information of the employer upon and following the termination of the employment.
However, Canadian courts usually void such clauses if they are unreasonable, whether based on time and/or geographic area of a non-compete agreement. All such clauses must be so drafted that they are no more restrictive than what is required to protect a legitimate business interest.
Once drafted, it is important that an employment contract is carefully reviewed by the employee before he or she signs. This review process ensures that both parties have fully comprehended the terms and conditions of their engagement.
Employers are supposed to encourage employees to ask questions and, if necessary, seek independent legal advice before signing the contract. By signing the contract, both parties will have agreed upon and understood everything that is going to be helpful for them in entering the working relationship with confidence, and both their rights and obligations will be clearly explained.
