Employment contract law changed in 2015. Have you reviewed yours?

December 10, 2015 Adam Gorley Employee Relations, Employment/Labour Standards, HR Policies and Procedures, Human Resources, Notice, Damages and Settlements, Payroll, Penalties and Fines, Pensions and Benefits, Source Deductions and Reporting, Wages and Compensation

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In June, at the 16th annual Ontario Employment Law Conference, we heard about how recent court decisions have changed how the law applies to employment contracts, most importantly terminations, but also off-duty conduct, consideration and restrictive covenants.

One important message from Landon Young and Jeremy Schwartz from Stringer LLP was that employers need to review their employment contracts, you can update them or change their terms while complying with the law, and failing to do so can cause your organization financial and reputational damage.

Introducing an employment contract to existing employees

If you don’t have contracts with your employees, we learned that employers leave themselves open to flexible and unpredictable common law provisions. If an employee takes an employer to court without a contract, the court is more likely to decide in the employee’s favour. And if you want to implement employment contracts where previously you’ve done without them, you’ll have to offer employees consideration to sign that new contract.

Termination provisions

On termination provisions in employment contracts, we heard that employers should either note generally that the employee will receive the minimum entitlements under the ESA or specifically spell out the entitlements, including benefits. Also, consider exceeding the ESA minimums.

Off-duty conduct

If you include a morality clause, a court might not uphold it. In addition, a morality clause won’t be enforceable if it infringes on employees’ human rights or privacy rights.

It’s crucial to explicitly state the connection between an employee’s off-duty conduct, employment and the employer’s interests. You can and should prohibit employees form harassing co-workers on social media (and anywhere).

Get advice before you change an employee’s contract

The two lawyers also recommended you get an employment lawyer to review contracts periodically. And it is excellent advice.

Before you do that, though, you can try The New Online Human Resources Advisor free for 30 days.

HRA features clear and comprehensive commentary on employment contracts, from the foundation to the most recent developments, plus a sample employment contract and other valuable documents and tools to help you understand how to prepare and update contracts without violating employment standards, health and safety law, human and privacy rights and the common law.

Watch this brief video to see how The New Human Resources Advisor works and what it can do for you. Then click here to take a trial!

We’d also love to hear how you’ve dealt with employment contracts this year! Have you reviewed in light of these legal developments? What challenges have you faced? Let us know in the comments.

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Adam Gorley

Editor at First Reference Inc.

Adam Gorley is a copywriter, editor and researcher at First Reference. He contributes regularly to First Reference Talks, Inside Internal Controls and other First Reference publications. He writes about general HR issues, accessibility, privacy, technology in the workplace, accommodation, violence and harassment, internal controls and more. Read more