Employment Agreement BC
GROW YOUR TEAM WITH LEGAL PROTECTION
Growing your business and need to hire more employees? You’d be wise to consider creating an employment agreement. This contract outlines the terms and conditions of employment, including what an employee’s responsibilities will be, how much they’ll be paid, and any benefits they’ll receive.
The Benefits of Employment Agreements
By setting up an employment agreement right from the beginning, each party will know exactly what to expect from one another, and you can avoid misunderstandings over the course of the working relationship. Your employment agreements will also be the backbone you’ll depend on when it comes to pay increases, contract updates, conflict resolution, and how to proceed when someone is terminated or voluntarily leaves the company.
Structuring Effective Employment Agreements
At Parr Business Law, our team will be able to assist you in crafting a detailed and effective employment agreement. Some of the aspects that are often included in these agreements include:
1
Role and Responsibilities: Clearly define the job title, responsibilities, and expectations. This clarity helps in setting performance standards and evaluating employee contributions.
2
Compensation and Benefits: Detail the salary structure, including any bonuses or commissions. Outline the benefits package, such as health insurance, vacation days, and retirement plans.
3
Work Hours and Location:
Specify the regular working hours, any flexible work arrangements, and the primary location of work.
4
Duration of Employment: Indicate whether the employment is fixed-term or indefinite. Clarify the conditions under which the contract may be renewed or terminated.
5
Confidentiality and Non-Compete Clauses: Protect your business’ sensitive information and interests with legally sound confidentiality and non-compete agreements.
6
Dispute Resolution:
Include procedures for addressing workplace disputes, grievances, or misunderstandings.
Issues That Can Arise Without Employment Agreements
In the absence of a formal employment agreement, several challenges can arise that may hinder the smooth operation of your business and the satisfaction of your employees.
Some of the issues that can arise include:
Payment & Salary Disputes
By having details regarding salary, compensation, and benefits outlined in an employment contract you can protect your business from potential disputes.
A legally binding contract ensures that the employee is aware of payment structures and acknowledges they accept these terms.
Unclear Expectations
A primary concern is the potential for misunderstandings about job expectations.
Without a clear, written outline of job duties, employees may be uncertain about their responsibilities. This can lead to inefficiency and dissatisfaction within the workplace.
Disciplinary and Termination Disputes
The enforcement of company policies and disciplinary procedures can become significantly more challenging without a signed agreement. A formal employment agreement typically includes acknowledgment and acceptance of company policies, making it easier for employers to enforce these policies and take disciplinary action or terminate an employee when necessary.
Unclear Severance Obligations
Statutory severance is the minimum payment or notice mandated by employment standards legislation in the event of a termination without cause. In British Columbia, the Employment Standards Act (British Columbia) is the relevant legislation for the majority of employees.
For the provisions outlined in the Employment Standards Act (British Columbia) to be applicable, clarity in the employment contract is essential. In the absence of a contract or if it lacks a termination provision, an employer must provide notice or payment in lieu of notice, determined by the courts as reasonable, a concept referred to as common law severance.
Common Law Severance:
The amount of reasonable notice required from an employer is contingent upon specific factors:
— Employee’s age
— Length of service
— Employee’s position and salary
— Availability of comparable employment opportunities
Typically, older or long-serving employees are entitled to extended notice. However, factors such as job specialization and market availability must also be considered. The structure of common law severance can take various forms, including working notice, pay in lieu of notice, salary continuance, or a combination of these methods.
When structuring severance packages, employers should seek legal counsel due to the stringent oversight of courts on employee entitlements. Notably, when providing pay in lieu of notice, the employee is entitled to any additional benefits they would have received during the corresponding notice period.
With limited exceptions, Canadian employers can terminate employment relationships at any time without cause, provided proper notice or pay in lieu of notice is given. This legal framework demands precision and compliance within the nuanced landscape of employment regulations.
Steps to Creating a Legally Binding Employment Agreement
Creating an employment agreement involves a process of understanding both the employer's needs and the legal requirements:
1) Initial Consultation: We will discuss the specific requirements of the role, your business needs, and legal considerations.
2) Drafting the Agreement: Based on the consultation, we will draft an agreement that covers all important aspects of employment.
3) Review and Adjustments: We will review the drafted contract together and make any changes necessary.
4) Finalization and Signing: Allow for a review period where both parties can suggest changes or seek clarifications. Once all parties agree, the final agreement is signed, making it legally binding.
5) Regular Updates: As your business needs evolve, it is a good idea to regularly review and update your employment agreements.
FAQ
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Without an employment agreement in place, you may run into employee disputes over compensation and benefits, uncertainty as to what your employees’ rights or your obligations as an employer are, and a lack of clarity around what you can and can’t do when it comes to terminating employees.
Note that a missing or improperly drafted employment agreement can generate substantial severance liabilities for your company, as can preparing an employment agreement that conflicts with applicable employment laws.
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First, consider the basic terms that need to be outlined in your employment agreement, such as pay, required hours, duties of employment, and rights of termination. To ensure your employment agreement covers all your bases while at the same time complying with governing legislation, we recommend seeking professional legal counsel. The lawyers at Parr Business Law can help you create an employment agreement that includes everything needed to ensure mutual clarity for you and your employees.
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While a well-written employee agreement will be legally binding, specific terms of an employment agreement could be void if they conflict with applicable legislation or case law. We recommend seeking professional legal counsel to ensure your employment agreements are legally valid.
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When it’s time to add some new faces to your team, make sure you have an employment agreement in place. Our lawyers have the specialized knowledge to provide you with reliable and candid legal advice on employment agreements so you can protect your business, attract the best candidates, and avoid conflict down the road. Schedule a free consultation call with us today to learn more.