contracts employment 101
DESCRIPTION
In this presentation, FMC's Matthew Curtis, discusses the basics of employment contracts, including benefits of a written contract as well as terms and definitions to know.TRANSCRIPT
1
Contracts of Employment 101
A Presentation by:Matthew J. G. CurtisFraser Milner Casgrain LLPTel: (604) 691-6461Email: [email protected]
Thursday April 19, 2012Vancouver, B.C.
2
Overview
1. Why do you need a written employment contract?2. Important terms in an employment contract.3. Issues to consider and to avoid.
3
Benefits of a Written Contract• Certainty, certainty, certainty!• Severance obligations• Otherwise, an oral employment contract can be enforceable in
case of a dispute.
4
Benefits of a Written Contract (cont’d)
benefits
confidentialityseverance
compensationsupervisor
start/end date
probation
vacation hours/overtime
duties
workplace policies
restrictive covenants
5
Terms• If the contract addresses the following subjects, it must
provide at least what is the minimum under the applicable law such as the B.C. Employment Standards Act (“ESA”):– Vacation– Wages– Termination– Hours of Work– Leaves of Absence
6
Terms (cont’d)
The Basics:– Position and duties/responsibilities– Who the employee reports to– Following company policies– Hours of work – Leaves of absence– Term of Employment (definite or indefinite)
7
Terms (cont’d)
• The Basics:– Compensation– Vacation – Benefits → TIP: limit employer obligations to pay premiums only and not to
act as a self-insurer– Confidentiality/Intellectual Property– Post Employment Obligations– Restrictive Covenants, if applicable– Termination by the Employer and by the Employee
8
Terms (cont’d)
Termination:Without a Written ContractEmployment Standards Act, section 63:
– One week’s notice after three months of employment.– Two weeks’ notice after twelve months of employment.– Three weeks’ notice after three consecutive years of employment, plus
one additional week for each additional year of employment to a maximum of 8 weeks notice.
Maximum liability = 8 weeks notice or pay in lieu
Canada Labour Code, sections 230 and 235
9
Terms (cont’d)
Termination:Without a Written ContractCommon Law• No formula but ESA length of service is inadequate.• Age; length of service; nature of employment; availability of
alternative employment; any other factor a Court would consider relevant.
• Invariably more than ESA and Canada Labour Code.
10
Terms (cont’d)
Termination Provision:• Must meet ESA minimum.• Can use formula to exceed ESA minimum.• Lump sum payment, or salary continuation.• Change of control for executives.
11
Terms (cont’d)
Probation:• Less than 3 months, no ESA termination pay.• The common law still applies and may require notice or pay in
lieu of notice.• A written contract should clearly define the probationary
period.
12
Terms (cont’d)
Other terms to consider:• Entire agreement• Severability• Modification of the agreement• Dispute resolution – courts, arbitration?• Opportunity for employee to seek independent legal advice.• Governing law
13
Issues to Consider
1. Enter the written contract before the employment relationship begins.
2. Additional consideration is needed if significant changes are made later on. An offer of continued employment is not enough.
3. Give sufficient time for the employee to review the contract and to seek independent legal advice. Do not apply pressure to sign the contract.
14
Issues (cont’d)
Be aware of the Contra Proferentem rule when drafting a contract
The preceding presentation contains examples of the kinds of issues companies dealing with employment contacts could face. If you are faced with one of these issues, please retain professional assistance as each situation is unique.
