Legalese: Look it over

The applicable law governing your employment relationships is, in most cases, provincial. That is, a rental company operating in Alberta is likely governed by Alberta legislation. Similarly, a rental company in Ontario is governed by Ontario legislation. There are exceptions, where a company could potentially be subject to federal legislation. If you are concerned about the applicable legislation for your company, you are strongly encouraged to consult with a lawyer in your provincial jurisdiction.

It is always advisable that you enter into a written employment contract between your company and its employees. If the employment contract has not been reduced to writing, it is more likely that you and/or your employee(s) could disagree on at least some of the terms and conditions of their employment. You may come to realize that your expectations differ from those of your employees. Often the difference of opinion manifests itself only when it is too late, such as after a termination or illness of an employee.

When entering into written contracts of employment, it is good practice to allow your employees the opportunity to consult with their independent legal advisor prior to signing. One of the most common ways in which an employee attempts to avoid liability under a written contract of employment is the argument that they were somehow coerced into signing and that they had no chance to consult with their own attorney. Inserting a clause in the employment agreement to the effect that the employee has had an opportunity to obtain his/her independent legal advice, and actually permitting them an appropriate amount of time to obtain said advice, will go a long way in ensuring that the agreement is upheld on any court challenge.

Employment contracts are positive for your business on a number of levels. A written contract of employment can provide certainty for you in terms of your legal position vis-à-vis your employees (especially upon discipline or dismissal of an employee). From the perspective of your employees, it can give them confidence in knowing that the terms of their employment have been reduced to writing. You will also be able to better control the specific duties that your employees must fulfill, better define their rate of pay and salary expectations, the length of term for their positions and discipline procedures including notice and termination.

Incorporating objective criteria into your employment agreement wherever possible is best, as it can serve to limit subjectivity and differences in interpretation. For example, if you are in the practice of paying annual bonuses to your employees you could incorporate the objective criteria right into the employment contract. That way, your employee who does not receive his/her annual bonus at least will know exactly why, and will be less likely to complain or be otherwise unhappy. Some examples of objective criteria for annual bonuses might include new sales achieved, customers gained, company profits and/or attendance records, to name but a few.

Each employment contract obviously must be tailored to your specific needs, in order to reflect both your company and each specific position within your company. Spend some time with a lawyer in your jurisdiction who practices labour and employment law, and generate some employment contracts that you’re happy with. You and your employees will be happier for it.