Employment Contracts CEO... · Termination without cause: Notice or pay in lieu Must meet ESA...
Transcript of Employment Contracts CEO... · Termination without cause: Notice or pay in lieu Must meet ESA...
Lindsie Thomson
CSSEA – October 26, 2016
Employment Contracts
Today’s Discussion
Employment Contract – Why have one?
Employment Contracts – Contents
Existing Employees Without Employment
Contracts – What to Do?
Employment Contract – Why have
one?
Employment Contracts
Can be Oral, Written, or Both
Advantages to a written contract
Common Law
Implied terms may create surprises
i.e. Reasonable Notice
Employment Contracts
Best Practices
Get it in Writing
Use Clear Language – contra preferentum
Be Fair
Avoid duress, undue influence,
unconscionability
Give employees time to consider, get advice if
necessary
Employment Contracts
Basic Requirements:
Offer
Acceptance
Valuable Consideration
Flowing to each party
Different for contracts for new employees vs.
existing employees
Value of Written Contracts
Why Have a Written Contract?
Certainty
Reduced and Predictable Costs
Fewer Disputes
Added Protection
Employment Contracts
Compliance with Legislation – Employment
Standards Act (ESA)
Prescribes minimum employment standards
Some provisions do not apply to managers (e.g.
hours of work, overtime)
May incorporate minimum standards or provide
greater benefits
Employment Contracts
Contract Terms cannot fall below ESA
Standards
Notice/Pay in lieu of notice
Vacation and Vacation Pay
Overtime
Hours of Work
Leaves of Absence
Contents
Public Sector Employers Act
Vacation Leave – cannot carry forward or pay out
beyond one year
Sick Leave – cannot pay out in cash or vacation
leave
Provisions deemed to be included in employment
contracts
Employment Contracts - Contents
Contents
Contract should set
out all important
terms and conditions
of employment
Contents
Start Date
Length of Employment:
Fixed term?
Indefinite?
Contents
Position and Duties
Employer may enumerate or attach job description
Common law – cannot subsequently make
“fundamental changes”
So – reserve right in contract to make changes
Employee represents they possess required
skills/experience
Positions and Duties Clauses –Example
You will be employed in the position of “Group Home
Manager”. Your duties and responsibilities shall include
those duties set out in the attached Schedule “A” to this
Agreement.
During your employment, other positions, titles, duties and
responsibilities may be assigned to you from time to time,
consistent with your qualifications and experience. You
acknowledge and agree that any such changes shall not
constitute a breach of this Agreement or a constructive
dismissal.
Position and Duties Clause –Example Cont.
The Employee represents and warrants to the
Employer that the Employee has the required
skills and experience to perform the work
described in this Agreement. The Employee shall
perform such work at all times faithfully, diligently
and to the best of the Employee’s abilities.
Contents
Hours of Work
Sets out what times the Employee is expected to
work
Be cautious – if the contract expressly sets out
hours of work, anything beyond/outside these times
may give rise to a claim for “overtime”
Hours of Work Clause – Example
Hourly Employees:
You will be expected to work full time (forty (40) hours per
week) to be completed during normal office hours. This is not a
guarantee of work hours and your hours of work per week may
increase or decrease with the needs of the Employer.
You must not work any overtime unless you have obtained
written permission in advance from Manager. Any overtime
worked will be paid in accordance with the British Columbia
Employment Standards Act, as amended from time to time
Contents
Definition of “manager” – ESA Regulations
Section 1(1):
“manager” means
(a) a person whose principal employment responsibilities
consist of supervising or direction, or both supervising
and directing, human or other resources, or
(b) a person employed in an executive capacity;
Hours of Work Clause – Example
Managers, Employees exempt from ESA:
You will be employed on a full-time basis, generally eight (8) hours per
day Monday to Friday, but your hours of work may vary and may be
irregular. You acknowledge that your hours of work will be those required
to meet the objectives of the position. It is expressly recognized and
agreed that the Salary agreed to is an annual salary and is not
attributable to a particular length of day(s) or week(s). You acknowledge
that the Salary constitutes compensation for all hours worked as you will
have no entitlement to overtime, additional pay or time off in lieu in
respect of any additional or overtime hours worked and hereby waive any
claim for overtime pay, or any additional pay for hours worked.
Contents
Probationary Clause
Duration
Frequency and Form of Evaluation
Extensions
Probationary Clause - Example
You will be on probation for the first three (3) months of
your employment (the “Probationary Period”). The
Employer reserves the right to terminate your employment
at any time during the Probationary Period, without notice
or severance pay, if we determine in our sole discretion
that your performance is unsatisfactory or that you are
otherwise unsuitable for continued employment.
Contents
Remuneration
Salary/Wage Rate
Bonuses
Overtime
Vacation Pay
Contents
Benefit Plans
Right to alter carrier, benefits
Employer liability limited to premium payment
Benefits Clause – Example
After three months of employment, the Employee shall be entitled to
participate in any and all group insurance plans, pension plans, and other
benefit programs (the “Employee Benefits”) which may be in effect during
the Employee’s employment. The Employer reserves the right to
unilaterally revise the terms of the Employee Benefits, to change carriers,
or to eliminate any Employee Benefits altogether.
Benefits will be provided in accordance with the formal plan documents or
policies and any issues with respect to entitlement or payment of benefits
under any of the Employee Benefits will be governed by the terms of such
documents or policies establishing the benefits in issue and will be a
matter between the Employee and the insurer and the Employer will have
no further obligation but to ensure the appropriate payment of premiums.
Contents
Termination Clause:
With cause
Definition of “just cause”
Specify grounds
Termination Clause – Example
The Employer can terminate your employment at any time
without any notice, payment in lieu of notice, or other
compensation, for cause. For the purposes of this
Agreement, cause means:
(a) any act, omission, or behaviour that constitutes
cause for dismissal at common law; or
(b) any material breach by you of a provision of this
Agreement.
Contents
Termination Clause
Without cause
Notice/Severance upon termination
Must meet or exceed ESA standards
Common law “reasonable notice” otherwise
Bardal Factors
24 month rough upper limit
Termination Clause – Example
Following completion of the Probationary Period,
the Employer may terminate your employment
without cause, and without further obligation, by
providing you with working notice of termination,
or, in the Employer’s sole discretion, payment of
wages in lieu of notice, or a combination thereof,
in an amount limited to the termination pay
required by the British Columbia Employment
Standards Act, as amended from time to time.
Contents
Termination Clause
Options:
Working notice
Lump sum payment
Salary continuance
Combination
Contents
Suspension Clause
Provides that the Employer may suspend an
Employee in certain circumstances
Without this clause – the common law provides that
a suspension with or without pay may constitute a
constructive dismissal
Suspension Clause – Example
The Employer may suspend the Employee, with
or without pay, where, in the opinion of the
Employer, it is necessary pending an
investigation or as a disciplinary measure. Such
suspension shall not constitute a breach of this
Agreement or a termination of the Employee’s
employment with the Employer.
Contents
Governing Law and Attornment
Provides that the contract will be governed by
British Columbia law
Any legal proceedings must be commenced in BC
Governing Law and Attornment Clause – Example
The terms of this Agreement, and any action arising hereunder, shall
be governed by and construed in accordance with the domestic laws
of the Province of British Columbia, Canada, without giving effect to
any choice of law or conflict of law provision or rule (whether of the
Province of British Columbia or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
Province of British Columbia.
Each of the parties hereto irrevocably accepts and attorns to the
exclusive jurisdiction of the Superior Courts of the Province of British
Columbia for any and all disputes arising out of this Agreement.
Contents
Handbooks and Policies
To be enforceable, must refer to policy or
procedures manual in contract
Provide copy to employee at the same time as the
contract
Put key terms in contract – not buried in handbook
or policy
Contents
Confidentiality Agreements
All Employees – Good Faith Obligations
Not to disclose confidential information
Not to use such information to compete unfairly
Contents
Severability/Entire Agreement
Standard provisions which ensure:
If one provision is unenforceable or contrary to
law – remaining provisions continue to be
effective
There are no oral or written representations
modifying the terms of the contract
May assist in avoiding disputes between parties
Severability Clause – Example
All paragraphs, terms and covenants contained in
this Agreement are severable, and in the event
that any of them is held to be invalid,
unenforceable or void by a court of a competent
jurisdiction, such paragraphs, terms or covenants
shall be severed and the remainder of this
Agreement shall remain in full force and effect.
Entire Agreement Clause – Example
This Agreement constitutes the entire agreement between
the parties with respect to the employment of the Employee
and any and all previous agreements, written or oral, express
or implied, between the parties or on their behalf relating to
the employment of the Employee by the Employer are
terminated and cancelled and each of the parties releases
and forever discharges the other of and from all manner of
actions, causes of action, claims or demands whatsoever
under or in respect of any such agreements.
Contents - Enforceability
A court may refuse to enforce an employment contract or portions of it
Importance of Severability Clause
Enforceability Considerations:
Ambiguity
Misrepresentations
Undue Influence
Failure to comply with ESA
Consideration
Deterioration of Substratum
Employment Contract Checklist
Preliminary Considerations
Authorized to work in Canada?
Existing Employment Contract?
Consideration: offer contract
before employment commences
OR ensure consideration
provided
Incorporate Handbook?
Policies?
Employment Relationship
Identity of Employer?
Indefinite or Fixed-Term?
If Fixed-Term – renewal clause?
Probationary Period and
duration?
Employee representation
regarding skills, qualifications?
Employee to devote all his/her
time to the Employer?
Employment Contract Checklist
Position and Duties
Definition of position, duties,
responsibilities, reporting
relationships, etc.
Attach job description?
Extent of Employer’s ability
to make unilateral changes to
position, duties, work
location, etc. during
employment relationship
Salary/Wage Rate
Describe salary/wage rate
When/how is the Employee
paid?
Deductions
Salary/wage rate increases
Employment Contract Checklist
Benefits
Describe current benefits
Premium payments:
Employer/Employee
Employer’s liability limited to
payment of premiums
Pension or RRSP?
Vacation
Weeks’ vacation per annum
Calendar year or anniversary
date?
ESA model or can vacation
be taken in the first year?
Unused vacation entitlement
Employment Contract Checklist
Termination of Employment
Termination without pay or
notice for just cause
Expanded definition of just
cause?
Termination without cause:
Notice or pay in lieu
Must meet ESA standards
Must include vacation pay
Define how payment in lieu is
calculated (salary only, bonus,
benefits, etc.)
Resignation by Employee –
notice required
Employer’s obligations upon
termination (e.g. pay salary
and vacation up to last day of
employment, when benefits
terminate, other incentives,
etc.)
Employee’s obligation to
return all files, Employer
property upon termination
Employment Contract Checklist
Other Clauses:
Entire Agreement – No representations
Governing law
Attornment
Severability
Consideration acknowledgment
Addresses for providing notices
Existing Employees Without
Employment Contracts
Existing Employees
Where Employer seeks to introduce/amend
contract of employment after employee has been
hired/began working
Existing Employees
Written contract signed after start of employment
is not enforceable
Additional Concerns for:
Employees without a written Employment Contract
Employees under a previous written contract
Past service is not extinguished
Existing Employees
Consideration
Fresh consideration required to amend conditions
of employment
For new employees – employment suffices
For existing employees – continued employment
not valid consideration
Existing Employees
Consideration
Employees must receive something of value in return
for signing the new contract
Must be something the employee did not already
have under the current agreement
Examples:
Salary increase
Better benefit plan
Bonus payment, etc.
Fresh Consideration Clause –Example
The parties acknowledge and agree that this Agreement
has been executed by each of them in consideration of a
signing bonus in the amount of $250 to be paid to the
Employee, the mutual promises and covenants herein
contained, and for other good and valuable consideration,
the receipt and sufficiency of which is acknowledged. The
parties waive any and all defences relating to an alleged
failure or lack of consideration in connection with this
Agreement.
Existing Employees
Options for existing employees:
Accept the new terms
Remain in employment and insist on original terms
Existing Employees
If Existing Employee Will Not Agree
Not a quit
Employer Options:
Negotiate the terms
Provide reasonable notice of change or
dismissal
Scrap the idea