Why reinvent the wheel? Drafting employment contracts, policies, termination letters and releases based on a past precedent is often a good place to start. It is usually both time and cost efficient, and for someone unfamiliar with the document, it’s a great learning opportunity. In today’s knowledge economy, there are a ton of great online HR resources to draw from, and it levels the HR playing field so that both entrepreneurs and large global corporations can have access to good legal documents.
When using a precedent or online resource, here are the top 3 tips to ensure the document is legally enforceable in your workplace:
- Jurisdiction: Always, always be sure the document is written for a Canadian workplace and is governed by Canadian law. Look for the governing law provision near the end of most legal documents. More often than not, the online resource will be a US–drafted document, which gives rise to very different fundamental laws. For example, we do not have “at–will” employment in Canada, such that every employment relationship is a contractual relationship, whether express/written or implied. This means that whether you have a great contract, or a really shoddy version that won’t be legally enforceable, the relationship is bound by contract. In the absence of the enforceable written contract, the employee is entitled to the much broader common law damages (i.e. the implied contract).
- Benefits upon termination: The Ontario Employment Standards Act requires all benefits to continue during the statutory notice period, and the common law generally requires the employer to make the employee whole during the notice period. A termination provision that simply provides a few weeks/months of pay with no reference to benefits runs the risk of being declared invalid for attempting to contract out of statute. This is an area where Canadian case law is rapidly evolving, and can be one of the most challenging issues at termination. This is particularly so for terminations of employees who have a direct need for the benefits but cannot obtain similar benefits through individual insurance. For many older workers, the odds of finding a new position that will offer benefits are not great, so benefits will often be a key issue. You’ll want to be able to rely on an up–to–date provision.
- Employee vs. independent contractor:A good employment contract will very clearly set out exactly whether the new hire is an employee or whether he or she is an independent contractor. These are substantively different types of workplace relationships, giving rise to different tax consequences, employment standards and termination entitlements. Even a very good, otherwise legally tight contract, however, will be useless if the actual relationship is not captured. The CRA, Ministry of Labour and the courts will all ignore the contract if the relationship is clearly one or the other, and the contract attempts to mischaracterize the actual relationship. This is a legal question based on various factors considered in each of the different forums.
We fully embrace the exciting and rich array of online resources for HR issues, but it remains important that those resources are enforceable and up–to–date. Our clients come to us with increasing sophistication and awareness of issues, letting us hit the ground running when providing legal advice. This hybrid experience will continue to evolve as employers can increasingly compliment their legal advice with online resources and knowledge.