Lindsie Thomson

CSSEA – October 26, 2016

Employment Contracts

Today’s Discussion

Employment Contract – Why have one?

Employment Contracts – Contents

Existing Employees Without Employment

Contracts – What to Do?

Employment Contract – Why have

one?

Employment Contracts

Can be Oral, Written, or Both

Advantages to a written contract

Common Law

Implied terms may create surprises

i.e. Reasonable Notice

Employment Contracts

Best Practices

Get it in Writing

Use Clear Language – contra preferentum

Be Fair

Avoid duress, undue influence,

unconscionability

Give employees time to consider, get advice if

necessary

Employment Contracts

Basic Requirements:

Offer

Acceptance

Valuable Consideration

Flowing to each party

Different for contracts for new employees vs.

existing employees

Value of Written Contracts

Why Have a Written Contract?

Certainty

Reduced and Predictable Costs

Fewer Disputes

Added Protection

Employment Contracts

Compliance with Legislation – Employment

Standards Act (ESA)

Prescribes minimum employment standards

Some provisions do not apply to managers (e.g.

hours of work, overtime)

May incorporate minimum standards or provide

greater benefits

Employment Contracts

Contract Terms cannot fall below ESA

Standards

Notice/Pay in lieu of notice

Vacation and Vacation Pay

Overtime

Hours of Work

Leaves of Absence

Contents

Public Sector Employers Act

Vacation Leave – cannot carry forward or pay out

beyond one year

Sick Leave – cannot pay out in cash or vacation

leave

Provisions deemed to be included in employment

contracts

Employment Contracts - Contents

Contents

Contract should set

out all important

terms and conditions

of employment

Contents

Start Date

Length of Employment:

Fixed term?

Indefinite?

Contents

Position and Duties

Employer may enumerate or attach job description

Common law – cannot subsequently make

“fundamental changes”

So – reserve right in contract to make changes

Employee represents they possess required

skills/experience

Positions and Duties Clauses –Example

You will be employed in the position of “Group Home

Manager”. Your duties and responsibilities shall include

those duties set out in the attached Schedule “A” to this

Agreement.

During your employment, other positions, titles, duties and

responsibilities may be assigned to you from time to time,

consistent with your qualifications and experience. You

acknowledge and agree that any such changes shall not

constitute a breach of this Agreement or a constructive

dismissal.

Position and Duties Clause –Example Cont.

The Employee represents and warrants to the

Employer that the Employee has the required

skills and experience to perform the work

described in this Agreement. The Employee shall

perform such work at all times faithfully, diligently

and to the best of the Employee’s abilities.

Contents

Hours of Work

Sets out what times the Employee is expected to

work

Be cautious – if the contract expressly sets out

hours of work, anything beyond/outside these times

may give rise to a claim for “overtime”

Hours of Work Clause – Example

Hourly Employees:

You will be expected to work full time (forty (40) hours per

week) to be completed during normal office hours. This is not a

guarantee of work hours and your hours of work per week may

increase or decrease with the needs of the Employer.

You must not work any overtime unless you have obtained

written permission in advance from Manager. Any overtime

worked will be paid in accordance with the British Columbia

Employment Standards Act, as amended from time to time

Contents

Definition of “manager” – ESA Regulations

Section 1(1):

“manager” means

(a) a person whose principal employment responsibilities

consist of supervising or direction, or both supervising

and directing, human or other resources, or

(b) a person employed in an executive capacity;

Hours of Work Clause – Example

Managers, Employees exempt from ESA:

You will be employed on a full-time basis, generally eight (8) hours per

day Monday to Friday, but your hours of work may vary and may be

irregular. You acknowledge that your hours of work will be those required

to meet the objectives of the position. It is expressly recognized and

agreed that the Salary agreed to is an annual salary and is not

attributable to a particular length of day(s) or week(s). You acknowledge

that the Salary constitutes compensation for all hours worked as you will

have no entitlement to overtime, additional pay or time off in lieu in

respect of any additional or overtime hours worked and hereby waive any

claim for overtime pay, or any additional pay for hours worked.

Contents

Probationary Clause

Duration

Frequency and Form of Evaluation

Extensions

Probationary Clause - Example

You will be on probation for the first three (3) months of

your employment (the “Probationary Period”). The

Employer reserves the right to terminate your employment

at any time during the Probationary Period, without notice

or severance pay, if we determine in our sole discretion

that your performance is unsatisfactory or that you are

otherwise unsuitable for continued employment.

Contents

Remuneration

Salary/Wage Rate

Bonuses

Overtime

Vacation Pay

Contents

Benefit Plans

Right to alter carrier, benefits

Employer liability limited to premium payment

Benefits Clause – Example

After three months of employment, the Employee shall be entitled to

participate in any and all group insurance plans, pension plans, and other

benefit programs (the “Employee Benefits”) which may be in effect during

the Employee’s employment. The Employer reserves the right to

unilaterally revise the terms of the Employee Benefits, to change carriers,

or to eliminate any Employee Benefits altogether.

Benefits will be provided in accordance with the formal plan documents or

policies and any issues with respect to entitlement or payment of benefits

under any of the Employee Benefits will be governed by the terms of such

documents or policies establishing the benefits in issue and will be a

matter between the Employee and the insurer and the Employer will have

no further obligation but to ensure the appropriate payment of premiums.

Contents

Termination Clause:

With cause

Definition of “just cause”

Specify grounds

Termination Clause – Example

The Employer can terminate your employment at any time

without any notice, payment in lieu of notice, or other

compensation, for cause. For the purposes of this

Agreement, cause means:

(a) any act, omission, or behaviour that constitutes

cause for dismissal at common law; or

(b) any material breach by you of a provision of this

Agreement.

Contents

Termination Clause

Without cause

Notice/Severance upon termination

Must meet or exceed ESA standards

Common law “reasonable notice” otherwise

Bardal Factors

24 month rough upper limit

Termination Clause – Example

Following completion of the Probationary Period,

the Employer may terminate your employment

without cause, and without further obligation, by

providing you with working notice of termination,

or, in the Employer’s sole discretion, payment of

wages in lieu of notice, or a combination thereof,

in an amount limited to the termination pay

required by the British Columbia Employment

Standards Act, as amended from time to time.

Contents

Termination Clause

Options:

Working notice

Lump sum payment

Salary continuance

Combination

Contents

Suspension Clause

Provides that the Employer may suspend an

Employee in certain circumstances

Without this clause – the common law provides that

a suspension with or without pay may constitute a

constructive dismissal

Suspension Clause – Example

The Employer may suspend the Employee, with

or without pay, where, in the opinion of the

Employer, it is necessary pending an

investigation or as a disciplinary measure. Such

suspension shall not constitute a breach of this

Agreement or a termination of the Employee’s

employment with the Employer.

Contents

Governing Law and Attornment

Provides that the contract will be governed by

British Columbia law

Any legal proceedings must be commenced in BC

Governing Law and Attornment Clause – Example

The terms of this Agreement, and any action arising hereunder, shall

be governed by and construed in accordance with the domestic laws

of the Province of British Columbia, Canada, without giving effect to

any choice of law or conflict of law provision or rule (whether of the

Province of British Columbia or any other jurisdiction) that would

cause the application of the laws of any jurisdiction other than the

Province of British Columbia.

Each of the parties hereto irrevocably accepts and attorns to the

exclusive jurisdiction of the Superior Courts of the Province of British

Columbia for any and all disputes arising out of this Agreement.

Contents

Handbooks and Policies

To be enforceable, must refer to policy or

procedures manual in contract

Provide copy to employee at the same time as the

contract

Put key terms in contract – not buried in handbook

or policy

Contents

Confidentiality Agreements

All Employees – Good Faith Obligations

Not to disclose confidential information

Not to use such information to compete unfairly

Contents

Severability/Entire Agreement

Standard provisions which ensure:

If one provision is unenforceable or contrary to

law – remaining provisions continue to be

effective

There are no oral or written representations

modifying the terms of the contract

May assist in avoiding disputes between parties

Severability Clause – Example

All paragraphs, terms and covenants contained in

this Agreement are severable, and in the event

that any of them is held to be invalid,

unenforceable or void by a court of a competent

jurisdiction, such paragraphs, terms or covenants

shall be severed and the remainder of this

Agreement shall remain in full force and effect.

Entire Agreement Clause – Example

This Agreement constitutes the entire agreement between

the parties with respect to the employment of the Employee

and any and all previous agreements, written or oral, express

or implied, between the parties or on their behalf relating to

the employment of the Employee by the Employer are

terminated and cancelled and each of the parties releases

and forever discharges the other of and from all manner of

actions, causes of action, claims or demands whatsoever

under or in respect of any such agreements.

Contents - Enforceability

A court may refuse to enforce an employment contract or portions of it

Importance of Severability Clause

Enforceability Considerations:

Ambiguity

Misrepresentations

Undue Influence

Failure to comply with ESA

Consideration

Deterioration of Substratum

Employment Contract Checklist

Preliminary Considerations

Authorized to work in Canada?

Existing Employment Contract?

Consideration: offer contract

before employment commences

OR ensure consideration

provided

Incorporate Handbook?

Policies?

Employment Relationship

Identity of Employer?

Indefinite or Fixed-Term?

If Fixed-Term – renewal clause?

Probationary Period and

duration?

Employee representation

regarding skills, qualifications?

Employee to devote all his/her

time to the Employer?

Employment Contract Checklist

Position and Duties

Definition of position, duties,

responsibilities, reporting

relationships, etc.

Attach job description?

Extent of Employer’s ability

to make unilateral changes to

position, duties, work

location, etc. during

employment relationship

Salary/Wage Rate

Describe salary/wage rate

When/how is the Employee

paid?

Deductions

Salary/wage rate increases

Employment Contract Checklist

Benefits

Describe current benefits

Premium payments:

Employer/Employee

Employer’s liability limited to

payment of premiums

Pension or RRSP?

Vacation

Weeks’ vacation per annum

Calendar year or anniversary

date?

ESA model or can vacation

be taken in the first year?

Unused vacation entitlement

Employment Contract Checklist

Termination of Employment

Termination without pay or

notice for just cause

Expanded definition of just

cause?

Termination without cause:

Notice or pay in lieu

Must meet ESA standards

Must include vacation pay

Define how payment in lieu is

calculated (salary only, bonus,

benefits, etc.)

Resignation by Employee –

notice required

Employer’s obligations upon

termination (e.g. pay salary

and vacation up to last day of

employment, when benefits

terminate, other incentives,

etc.)

Employee’s obligation to

return all files, Employer

property upon termination

Employment Contract Checklist

Other Clauses:

Entire Agreement – No representations

Governing law

Attornment

Severability

Consideration acknowledgment

Addresses for providing notices

Existing Employees Without

Employment Contracts

Existing Employees

Where Employer seeks to introduce/amend

contract of employment after employee has been

hired/began working

Existing Employees

Written contract signed after start of employment

is not enforceable

Additional Concerns for:

Employees without a written Employment Contract

Employees under a previous written contract

Past service is not extinguished

Existing Employees

Consideration

Fresh consideration required to amend conditions

of employment

For new employees – employment suffices

For existing employees – continued employment

not valid consideration

Existing Employees

Consideration

Employees must receive something of value in return

for signing the new contract

Must be something the employee did not already

have under the current agreement

Examples:

Salary increase

Better benefit plan

Bonus payment, etc.

Fresh Consideration Clause –Example

The parties acknowledge and agree that this Agreement

has been executed by each of them in consideration of a

signing bonus in the amount of $250 to be paid to the

Employee, the mutual promises and covenants herein

contained, and for other good and valuable consideration,

the receipt and sufficiency of which is acknowledged. The

parties waive any and all defences relating to an alleged

failure or lack of consideration in connection with this

Agreement.

Existing Employees

Options for existing employees:

Accept the new terms

Remain in employment and insist on original terms

Existing Employees

If Existing Employee Will Not Agree

Not a quit

Employer Options:

Negotiate the terms

Provide reasonable notice of change or

dismissal

Scrap the idea