Drafting a clear and concise employment contract to avoid litigation claims

Although the terms of employment can be provided orally, outlining valuable information in a written contract is beneficial to both the employer and the employee. In addition to outlining responsibilities, a written contract also serves to resolve disagreements and can help avoid litigation claims.

“Primarily it’s about setting the rules for the relationship in a very clear and concise manner, so that both parties can easily reference it and know essentially what their rights are,” says Patrick Stepanian, legal manager at HR consulting firm Peninsula Canada. “It helps manage and keep a relationship on good terms.”

Aside from the minimum entitlements required by your provincial employment standards legislation, any additional clauses and policies that can be included will depend on the industry and type of employment being offered.  

Some important items to include in a written employment contract may include:

• Hours of work  
• Probation period
• Job responsibilities  
• Conditions of offer
• Layoff clause  
• Termination clauses and policy   

Employers must bear in mind that employment laws vary across provinces. Additionally, for any job contracts to be considered valid, they must follow the minimum terms and entitlements set by the employment standard legislation in the province.

Below are some best practices to follow while creating employment contracts: 

1. Provide the employee with enough time to review the contract  

2. Have the contract signed prior to the first day of work  

3. Always use clear, detailed language  

4. Attach relevant documents to the employment contract  
5. Employers should update their employment contracts and policies in compliance with changing legislation and legal requirements.  

“Employers should make sure that the contract properly incorporates the applicable employment standards legislation, so that you minimize or prevent exposure to common law, liability and entitlements,” says Stepanian. Failure to issue an adequate contract – or to update an existing contract – can result in wrongful dismissal claims, he adds.