5 Common Questions About Employment Contracts

Employment Law | October 31, 2022

Employment contracts are important documents used by employers to outline the specific duties, employment terms, and other crucial information for employees within their company. Though most employment contracts follow a similar format, there are several rules and standards that must be met to ensure legal compliance and protection for both the employer and the employee. At Linley Welwood, our team of employment lawyers knows how complex employment contracts can be. That is why we have compiled a list of 5 common questions about employment contracts to answer them and provide useful information for employees and employers.

Learn about some of the differences between employees and independent contractors.

5 Employment Contract FAQs

Common questions regarding employment contracts include:

1. What Should be Included in an Employment Contract?

While any employer or individual can draft an employment contract, the following elements should be included in the document:

  • A document title such as “Employment Contract” or “Employment Agreement”
  • The parties involved in the contract (the employer and the employee)
  • Specific terms and conditions beyond standard employment and labour laws (working hours, dress code, etc.)
  • Restrictive covenants (non-disclosures, non-compete, etc.) if applicable
  • Job responsibilities/description and daily tasks
  • Compensation details (hourly wage/yearly salary, benefits, commissions, etc.)
  • Start date, probationary period term (if applicable), and termination clauses
  • The type of employment (permanent full-time, temporary part-time, etc.)
  • Termination provisions and severance obligations upon termination
  • Probationary clauses

2. Do Employment Contracts Need to be Renewed?

No, unless otherwise stated. An employment contract is valid as long as an employee is employed with a company. Contracts may need to be updated to reflect new wages or responsibilities, but this does not require renewal.

3. What if an Employee Refuses to Sign an Employment Contract?

To put simply, if an employee refuses to sign an employment contract, they forfeit the position. In certain instances, parts of a contract can be renegotiated to ensure both parties are satisfied, but an employer is under no obligation to do so.

4. Is There a Difference Between a Job Letter and an Employment Contract?

Yes. Job letters are an informal way of presenting a candidate with the basic terms of employment, but they are not legally binding. Employment contracts are legally binding and must be agreed to by both the employee and the company/employer.

5. What are Implied Employment Contracts?

Implied employment contracts are often verbal agreements that can take place during an interview or a promotion. This means that, although not expressly written or stated by the parties, the implied term is reasonably expected by the parties.  An example would be if an employer states that the employee will receive a raise every 6 months but does not write it down. Although they are often not as clear as written contracts and can be disputed, implied contracts can be legally binding for the employer.

To learn more about employment contracts or to speak with one of our employment lawyers, get in touch with the team at Linley Welwood. We can be reached through our online contact form and will be happy to answer any questions you may have regarding our services or your situation.

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