Employers should not draft their own employment agreements or employment contracts for their employees. We strongly recommend any employer or business to retain an experienced employment lawyer to prepare or draft an employment agreement for them to suit the specific needs that the employer has.
Why should an employer use an employment lawyer to prepare their employment agreements for their employees?
There are several strong reasons against writing or drafting your own employment agreement if you are an employer.
First, there is no such thing as a “standard” employment agreement. Employers think that they can simply download an agreement off the internet or use AI to get some useful clauses to include in the agreement or copy some employment contract they borrowed from their friend or family member. This could be a grave mistake. There is no such thing as an employment contract that an employer can use repeatedly regardless of where the contract comes from, who made it or what time it was prepared. The contract needs to be specific to the situation at hand and should include information about an employee’s role and responsibilities related to their job (such as job title or duties), their pay or income, vacation time, various benefits and other workplace or employment policies.
Clauses in an employment contract are subject to a key piece of Ontario legislation called the Employment Standards Act or “ESA.” The ESA sets out certain key requirements that employers are bound by and cannot contract out of and, as such, the employer needs to be sure that they are abiding by the ESA. For instance, the ESA provides minimum statutory entitlements to employees for things like minimum wage, maximum work hours, termination of employment, severance pay, vacation pay, holiday pay, parental leave, sick leave, etc. Any part of an employment agreement that provides less than what is set out in the ESA to an employee is void and invalid. So, it is very important for employers to get entitlements correct in an employment contract or risk that contract not being enforceable.
Arguably the most important clause in an employment contract is the termination clause. This clause can be difficult to prepare even for lawyers. A termination clause sets out how the employee will be terminated and what notice they are entitled to when they are terminated or fired from their job. Most employers try to limit an employee’s entitlement to notice or pay in lieu of notice to the ESA’s minimum entitlements to notice in the termination clause. This means that the employer will try to reduce the notice period owed to the employee to only what is set out in the ESA and eliminate what could be owed to the employee under the common law. Employees are entitled to much longer notice periods under the common law in comparison to what would be typically owed to them in terms of notice under the ESA. Employers are on the hook to pay the employee more money in lieu of notice or provide a greater notice period before they terminate them under the common law if the termination clause fails to limit the employee to statutory minimum requirements. The case law which sets out what will cause a termination clause to be invalid changes quite frequently. As such, it is crucial that an employer utilize the skills of an employment lawyer to assist them in drafting a termination clause that has the best chance to being held to be a valid clause.
So, what should you do? Give us a call. The employment lawyers at Zeilikman Law can help employers with any concerns that they may have about employment contracts or agreements. To discover more helpful tips about this topic, start by reading what you need to know about employment contracts. You can also read yet another warning for employers from the Ontario Court of Appeal.
