Our Employment & Labour Group works closely with local businesses and Human Resource professionals to help them deal with existing problems or complaints initiated by employees. Often times, through careful planning Employers can avoid these issues all together, along with the hefty legal fees that are involved in resolving a legal battle.
We have launched a new series called HR Done Right! Tips from an Employment Lawyer, where in this article as well as across our social media accounts (@kswlawyers) we will add weekly tips that can assist Employers in thoughtful workplace management, and hopefully assist with keeping the complaints away!
Our Group regularly hold seminars and presentations on Employment, Labour and Human Rights topics, so don’t forget to sign up to our quartely newsletter to make sure you don’t miss out on the event notifications! Please don’t hesitate to email us any comments, feedback or suggestion on future topics!
HR DONE RIGHT! TIPS FROM AN EMPLOYMENT LAWYER
Tip #1: All employees should have signed written employment contracts with an enforceable termination clause.
It is a fundamental principle of employment law that employees who are terminated without just cause are entitled under “common law” to reasonable notice of termination, or pay if the employer does not want to provide advance working notice.
Where there is no enforceable written employment contract, a court will set the reasonable notice period of up to 24 months, or even more in exceptional circumstances, taking into consideration their age, years of service, position, the job market, and other factors.
Employers are permitted to circumvent the reasonable notice that a court would otherwise award by specifying another period of notice in the employment contract. However, the contractual notice must still comply with the minimum requirements of employment standards legislation.
The difference between what is required at common law versus employment standards can amount to tens, if not hundreds of thousands of dollars. As such, a well-drafted termination clause in a written employment contract is a useful tool for employers to provide both clarity and certainty regarding their obligations upon terminating the employee.
Tip #2: An employment contract signed after the first day of work is likely unenforceable.
Many employers are unaware of the legal challenges that could occur if an employee doesn’t sign their employment contract and policies before their first day of work.
When you enter into a new employment relationship with a prospective employee, the consideration you’re providing the individual after the contract has been signed, is work (employment), salary, benefits, etc. In return, the consideration the individual is providing to you is signing off on your terms and conditions and providing you with services.
Once the employee starts working, you can no longer offer the consideration of employment in exchange for the sign off, meaning the contract will not be enforceable.
WHY DOES THIS MATTER?
If a contract is not enforceable, the terms in it are not either, including any limiting termination or severance clause. So if the employer needs to terminate the employee later on, they will have to provide notice or severance pay in accordance with common law (what the Courts say), which results in much longer notice periods (usually months instead of weeks) – see Tip #1.
Tip #3: It’s never too late to have employees sign a written employment contract, as long as you provide “fresh” consideration.
See Tip #1 and #2 for background.
Modification of a pre-existing contract (verbal or written) will likely not be enforced unless there is a further benefit to both parties. Mere continuance of employment by the employer is not readily viewed by the courts as constituting consideration. There must be adequate consideration and adequate consideration requires something more than the bald promise that the employee will not be immediately terminated if they don’t agree to the new terms. Continued employment alone is not regarded as consideration for a new covenant extracted from an employee during the term of employment because the employer is already required to continue employment until there are grounds for dismissal or reasonable notice of termination is given.
Courts have provided some indication as to what is sufficient and insufficient consideration. A one-time bonus, a raise or combination of bonus and more vacation time can be deemed sufficient consideration for the variation of an employment contract.
Note to our Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter, please contact our Employment & Labour Group.
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