HRMA 2015: Employment Contracts in British Columbia

By Catherine Skrzypinski May 14, 2015
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VANCOUVER, British Columbia—Having written employment contracts allows an employer and its employees to have a clear understanding of expectations at the start of a business relationship, an employment lawyer told attendees recently at the Human Resources Management Association (HRMA) Conference and Tradeshow 2015.

“Be sure an employee signs a written agreement before they start a job,” said Simon Kent, founder and senior partner of Vancouver-based Kent Employment Law. He likened the situation to “the beginnings of a romantic relationship—you have all these good feelings about the person, and you just know it’s going to work out. … It doesn’t always work out.”

The absence of a written employment contract introduces a myriad of potential problems:

  • Having an employee start his or her position before finalizing an agreement.
  • Drafting contracts internally to save money.
  • Drafting contracts in a rush.
  • Relying on standard documents from another jurisdiction.
  • Failing to retain a signed copy of the agreement.
  • Failing to make an employee aware of termination provisions.

In Canada, employers must give a reasonable notice of termination, explained Donovan Plomp, a partner in the labor and employment group at McCarthy Tetrault in Vancouver. This differs from at-will employment in the United States where an employee can be dismissed for any reason.

An employer in British Columbia (B.C.) must follow the Employment Standards Act to determine the minimum requirements of severance, Kent added. Employees in B.C. are entitled to eight weeks of severance at maximum.

If there is no written employment contract, courts in B.C. can grant terminated employees up to 24 months of severance based on their age, length of service, position (including degree of responsibility), and level of training and education. For instance, senior management can get up to six months’ severance, Kent noted.

“A written employment agreement can save a company from a lot of hassle, and potentially money, in the future,” he added.

Before Signing on the Dotted Line

Companies in B.C. can protect themselves by including certain language and clauses in employment contracts, Plomp explained. Examples include:

  • “Specific tasks are not guaranteed; therefore, must be flexible in performing assigned duties.”
  • “This offer is contingent upon completion of a successful background check.”
  • “Benefits are subject to terms and conditions.”
  • “Salary increases will be negotiated to take effect at the beginning of each renewal period.”
  • A noncompete clause, or an agreement that forbids a worker to perform tasks for a competitor for a specific length of time.
  • A discretionary bonus clause that determines when a bonus is due and how much to pay without obligation.
  • An overtime clause that states an employee is to be paid for all hours worked.
  • A nondisclosure clause that states all information and documents are strictly confidential.

“Employees can be very challenging to manage,” Kent stated. “Relationships fall apart because of a lack of clarity about how things are going to be handled. An employee contract should deal with any eventuality that might come up.”

If a potential employee states that a contract is full of legalese, it may be worth having an employment lawyer present for the signing of the contract, Kent added. “If it’s a complicated agreement, then have someone explain it to them.”

HR’s Role in Employee Termination

Employees who are fired often experience difficult or embarrassing departures, such as a security guard waiting to escort them out. “A lot of employees have this emotional need to be told why they’ve been let go, and HR is not required to tell them,” Kent said. “As HR professionals, treat a person with respect at dismissal. Then they are less likely to respond with litigation.”

Catherine Skrzypinski is a freelance writer based in Vancouver.

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