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Drafting an Employment Contract

Employment Law | March 30, 2021 | Written by

Also known as an employment agreement, employment contracts are a vital component of any place of employment. These contracts are 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, we offer complete employment law services and can help ensure that your employment contracts comply with applicable laws.

Employment Contract Drafting and Review

While any employer or individual can draft an employment contract, several elements must be included:

  • 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.).
  • Confidentially clauses (Non-disclosures, non-compete, etc.) if applicable.
  • Job responsibilities 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.

To ensure these elements are included and to limit the liability that your company is exposed to, we strongly recommend a review from our employment law lawyers at Linley Welwood.

Employment Contract FAQs

In addition to the contents of employment contracts, there are several common questions regarding legal aspects and other factors. These questions include:

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.

What if an Employee Refuses to Sign an Employment Contract?

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.

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, on the other hand, are legally binding and must be agreed to by both the employee and the company/employer.

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 on the employer.

To ensure that your business is meeting the legal requirements for employment contracts, reach out to the team at Linley Welwood. We will work with you to ensure that your contracts include everything they need to keep your business safe in the event of an employee dispute.


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