An employment contract (commonly referred to as an employment offer letter) is a legally binding agreement between an employer (or union) and an individual. This document is used to establish the rights, responsibilities, and obligations of the two parties. More specifically, employment contracts are drafted to outline all terms of viable employment, including salary, probationary period(s), vacation rights, terms of severance, etc. Both parties are encouraged to review an employment contract thoroughly before signing. It is important to ask questions when in doubt to ensure each party assiduously understands each clause, and all concerns are addressed.
How does an employment contract protect an employer? Employers can protect themselves against a potential lawsuit by including company-specific terms in an employment contract. For example, suppose an employee owes the organization some money. In that case, it is wise to have a clause in the employment contract that clearly states the employer is allowed to deduct the owing balance from the employee’s pay. It is illegal to remove any money from an employee’s paycheque without a viable reason or a mutual agreement.
Furthermore, an employment contract can restrict a former employee from using an organization’s confidential information after moving on to work elsewhere. More importantly, it can limit an ex-employee from working with a competitor, poaching staff, and soliciting clients for a reasonable period.
Moreover, employees may view an employment contract as a safeguard to their rights and expectations. A properly drafted employment contract can protect an employee from wrongful dismissal, constructive dismissal, and other unethical or unlawful treatment in the workplace. It can also confirm exceptional agreements, such as special working conditions (e.g., mileage and gas coverage, meal coverages, additional business expenses, etc.)
It is imperative to draft employment contracts that are company-specific, but at the same time, they must comply with provincial and federal regulations. Our members at HRO are experienced in formulating and implementing employment contracts for various industries.
Contact us today to see how we can help welcome your organization’s new team members through strategic onboarding: ✉️ [email protected]