Contracts Employment 101

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Contracts of Employment 101

A Presentation by:Matthew J. G. CurtisFraser Milner Casgrain LLPTel: (604) 691-6461Email: Matthew.Curtis@fmc-law.com

Thursday April 19, 2012Vancouver, B.C.

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Overview

1. Why do you need a written employment contract?2. Important terms in an employment contract.3. Issues to consider and to avoid.

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Benefits of a Written Contract• Certainty, certainty, certainty!• Severance obligations• Otherwise, an oral employment contract can be enforceable in

case of a dispute.

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Benefits of a Written Contract (cont’d)

benefits

confidentialityseverance

compensationsupervisor

start/end date

probation

vacation hours/overtime

duties

workplace policies

restrictive covenants

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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

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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)

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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

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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

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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.

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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.

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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.

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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

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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.

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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.

Thank You

Matthew J. G. Curtis

Tel.: (604) 691-6461Email: Matthew.Curtis@fmc-law.com