Employee Contract PDF

The Employment Contract January 15, 2025 10:23 AM Essential elements of a contract Contract: an agreement between two parties that is enforceable Contract law says that, for an agreement to qualify as a contract and be enforceable, it must meet the 3 criteria. 1. Offer - one party must have mad...

The Employment Contract January 15, 2025 10:23 AM Essential elements of a contract Contract: an agreement between two parties that is enforceable Contract law says that, for an agreement to qualify as a contract and be enforceable, it must meet the 3 criteria. 1. Offer - one party must have made the other party an offer. 2. Acceptance - the other party must have accepted the offer. 3. Consideration - each party must have promised to give something of value to the other In the employment context: - The parties are the employer and the employee - The employer makes a job offer - The employee accepts the job offer - The consideration from the employer is money in the form of wages - And the consideration from the employee is the work they will perform. Written employee contracts  Like other contracts an employment contract does not need to be in writing to be enforceable - A handshake deal constituting an offer and acceptance on the essential terms of employment (work for pay) can bind the parties (verbal/oral contract)  There are advantages to putting an employment contract in writing - Well written contracts can reduce the risk of misunderstandings, address potentially contentious issues, and reduce uncertainty Implied terms  Most employment contracts contain several implied terms  Implied terms are default or mandatory rules that the courts assume are part of an employment contract, even if they have not been expressly included  They exist because our society believes that it is fair and reasonable to place these expectations on an employer and employee in a working relationship Ex. An employer's duty to provide an employee with the tools and training they need to do their job properly Ex. An employer's duty to provide a safe working environment Ex. An employer and employee's mutual duty to act in good faith  Implied terms like the examples provided are one of the reasons that employment contracts are relatively short  There are a number of basic terms that are assumed to be part of every employment contract, it is unnecessary for those terms to be expressly set out in writing unless the parties want to change them in some way Ex. The parties might agree to a specific notice of termination period instead of relying on the common law's implied reasonable notice period Implied terms - mutual duty of good faith  The duty of good faith applies to an employer and an employee in an employment relationship  To act in good faith generally means to act reasonably, honestly, with transparency and with candor (frankness)  An employer's duty of good faith generally obliges the employer: - To treat employees reasonably in creating and applying policies and rules - To act with honestly when providing information and instructions to employees - To act with transparency and candor when addressing direct inquiries for information and guidance from employees  Employees are obliged to act in a fair and reasonable manner toward their employer  An employees duty of good faith generally obliges the employee: - To avoid conflicts of interests - Be honest - Avoid committing ay type of theft - Act with good judgement Implied terms - employer's duty to provide a safe working environment  Under common law, and under an alberta statute called the OHS act, an employer is obliged to provide a safe working environment for its employees  Regulations under the OHS act are filled with industry-specific safety rules and requirements that employers are required to follow  Employers have a duty to ensure the physical safety of their employees  In 2018 the OHS act was amended to ensure that employers provide workplaces that are free from harassment, bullying, and violence  Safety in the workplace under OHS also extends to the social and emotional environment  OHS mandates that employers have safety policies and procedures in a place for ensuring that employees are made aware of expectations for their conduct in the workplace; and for investigating incidents of harassment, bullying, and workplace violence Implied terms - employee's duty of confidentiality  The common law implies a duty of confidentiality on employees who obtain access to confidential employer information during their employment  An employee who discloses information that their employer has deemed confidential, without the employer's consent, will have breached their common law confidentiality obligation and might be sued by the employer  An employee's duty of confidentiality survives the end of their employment relationship, confidential employer information does not cease to be confidential simply because an employee no longer works for the employer. The written employment contract  For most employment relationships, the written contract can be fairly basic  Often consists of a letter from the employer offering the employee a job and setting out the key terms such as - Job start date and end date (if job is for a fixed term) - Job title and description - Place and hours of work LEGL 312 SB01 Page 1  - Place and hours of work - Compensation(wages) - Benefit entitlements - Termination clause - Probationary period  Offer letter may include provision requiring the employee to abide by employer policies, including policies regarding matters like discipline, absence, safety, harassment  For more complex employment relationships, like managerial positions, positions involving a high degree of skill and a position that require contractual terms - the written contract should be more formal  A written employment contract should be customized to reflect the issues that are important to both parties  Employers should be cautious of using single, standard form contract for all its employees. This is not a one size fits all situation Enforceability and interpretation of written employment contracts  Its important to appreciate that even after an agreement on the terms of employment is reached and a contract is signed, there are a number of issues that can affect the contract's enforceability and interpretation  a party who is unhappy with the terms of an employment contract may challenge the contract by raising any one of a number of issues Lack of consideration  In the employment context, the exchange of consideration usually involves a promise by the employer to pay the employee a certain amount of money in exchange for a promise by the employee to perform certain work for the employer  A lack of consideration can become a problem for an employment contract in two situations 1. When an employee begins work before the contract is finalized - They may later take the position that the contract they eventually signed is unenforceable because the employer provided no new consideration in exchange for its terms - If the employee makes that argument, any significant terms that limit their rights, or impose duties on them, that were not agreed to before they started working may prov e unenforceable  To prevent a contract term from being found unenforceable because a lack of consideration, employers should ensure that a written employment contract is finalized before the hiring process is completed or being the employee is allowed to begin to work 2. When the employer changes some of the employee's duties after the employment relationship begins - The employer should offer something additional (fresh consideration) to the employee - Amending an employment contract, by changing an employee's duties or rights, without providing consideration will usually make the new terms unenforceable Inequality of bargaining power  An employee might challenge a written employment contract by arguing that, when the contract was negotiated, they lacked sufficient bargaining power  Courts have been sympathetic to this type of argument where the terms of the resulting contract were unconscionable (unreasonably one-sided) and the employee did not understand them  To minimize the risk, an employer should take steps to ensure that their prospective employee's are treated fairly and receive a thorough explanation of the contracts key terms  It may also be a good idea to give a prospective employee time to obtain independent legal advice before they sign the contract Obsolescence  Obsolescence is another basis an employee might rely on to challenge an employee contract  A challenge on obsolescence is brought when the terms of the contract no longer reflect the realities of the employee's position  To ensure that a dated employment contract does not become invalid, it should be updated whenever there is a promotion or other significant change in the employee's duties  An obsolescence challenge can also be avoided where the termination clause in the original employment contract states that the employee has the right to a certain number of weeks notice for each completed year of service, with a specified minimum and maximum notice period Failure to meet minimum statutory standards  An employment contract can also be challenged for failing to meet minimum statutory employment standards  Minimum statutory employment standards are employment standards found in statues Ex. To terminate employment an employer must give an employee written termination notice of at least a) one week, if the employee has been employed by the employer for more than 90 days but less than 2 years, b) 2 weeks, if the employee has been employed by the employer for 2 years or more but less than 4 years  Courts will not enforce contract terms that fail to meet minimum statutory employment standards, and they will declare such terms invalid and ineffective if they are challenged  This is because parties are not permitted to "contract out" of minimum statutory employment standards Use of ambiguous language - contra preferentum rule  The contra preferentum rule is a common law that governs how contracts are interpreted  It is a Latin term that means "against the offeror"  The rule states that an ambiguous "vague or unclear" contractual term should be interpreted against the person who drafted the contract, or in the non-drafter's favour. The rationale for the rule is that the contract drafter could have avoided the ambiguity problem by using clearer language  Employment contracts are almost always drafted by the employer. So the contra preferentum rule ensures that ambiguous terms in an employment contract are interpreted against the employer, or in the employees favour  Employees need to make sure that the employment contracts they draft use clear and concise language  Employment contracts should not use any ambiguous terms LEGL 312 SB01 Page 2