Employment Contract Basics

A contract* is a legally enforceable promise or agreement between two or more persons for the exchange of goods and services. There must be an intention to enter into a legally binding contract. There are no particular words or forms that must be filled out by the parties. What is required is an offer by one side and an acceptance of the offer by the other.

An employment contract does not have to be in writing. When the contract is written, there is no standardized form that makes it final. An employment contract can simply be a job offer letter that contains the key terms, which the employee accepts in writing.

A contract does not mean that employers cannot fire or lay off the employee or that employees are bound to stay at the job. The minimum length of notice required to terminate you is set out in the BC Employment Standards Act, but this time period can be extended in the contract, or if not specifically written into the contract, a court can determine how much notice is reasonable. The notice an employee is required to give before quitting can also be set out in the contract.

In order to create an employment contract, both written or verbal, the parties must mutually agree and consent to the terms and conditions of the contract. In addition, the contract must follow the minimum employment standards laid out in the Employment Standards Act as described below. This means that even if a term or condition is written in a contract, it might not be enforceable if it goes against the rules in the Act.

A contract can include:

– salary or wage and future increases
– payment details (weekly/monthly/biweekly)
– hours of work – requirement per week/month/shift
– starting time/quitting time/break time
– job title and scope of duties
– holiday entitlement
– sickness entitlement
– pension plan details
– termination of employment contract (notice period)
– post-employment obligations (confidentiality, non-solicitation etc.)

If one of the parties fails or refuses to fulfill its promise without a valid reason recognized by law, the party suffering the consequences of this breach of promise can take the other party to court for damages.

Contracts must follow statutory law such as the Criminal Code of Canada and the Employment Standards Act. This means that one cannot contract to hire a sex worker as this relationship is illegal. It also means that an employer cannot contract out of obligations under the Employment Standards Act.

Termination by the employer

“For cause*:” The employer has the right to terminate the employment of an employee with just cause, which means a legitimate reason, without any compensation pay or notice* to the employee. Employers much show that the employee has been spoken to about the behaviour forming the cause for termination and had given the employee an opportunity to correct the behaviour and was given a warning. Examples of ‘just cause’ may include:
– theft
– fraud or dishonesty
– breach of duty
– serious willful misconduct
– conflict of interest, especially if it involves provable loss to the employer
– serious breach of company rules or practices
– serious undermining of the corporate culture
– chronic absenteeism or tardiness (not showing up or always being late)
– unsatisfactory performance

“For reasonable notice:” If the employer ends the employment without cause, they must give the employee reasonable notice. This means telling them ahead of time that they won’t be working there anymore, so they have time to get another job. The minimum notice required can be written in the contract, or if it wasn’t in a contract, the Employment Standards Act of British Columbia lists what the minimum notice required is depending on how long you worked there. The court has interpreted ‘reasonable notice’ differently depending on the situation, including the type of job, the time worked there, the age of the employee and the availability of similar jobs.

No compensation is required if an employee is given advanced written notice of termination the correct number of weeks beforehand. It must be in writing. Notice or compensation is not required if:

– the employee has worked there for less than 3 months in a row
– the employee quits or retires
– the employee works on an on-call basis doing temporary assignments which she/he can reject
– the employee is employed for a definite term
– the employee is hired for specific work to be completed in 12 months or less
– it is impossible to perform the work because of some unforeseen event or circumstances
– the employee refuses reasonable alternative employment

Termination by the employee

If the employee chooses to quit and end the employment, they must give minimum notice to the employer if stated in the contract. If it is not written in the contract, it is not required under the Employment Standards Act of British Columbia to give notice of the intention to quit, however, it is common practice to give your employer one or two weeks notice.

Minimum Standards – The Employment Standards Act and Regulations:

This legislation ensures that employees in BC receive at least the basic standards of compensation and conditions of employment. This includes:

• minimum wage
• paydays – all employees must be paid at least twice a month and must be paid within 8 days after the end of the pay period
• meal breaks – no employee to work more than 5 consecutive hours without a meal break
• overtime wages – pay 1 ½ times the regular wage for time over 8 hours, unless an agreement has been made to work different average work hours
• entitlements to statutory holiday and pay
• leaves from work including pregnancy/parental leave, jury duty etc.
• annual vacation and pay – employer must give employee an annual vacation of at least 2 weeks after 12 months of employment and 3 weeks after 5 years of employment
• deduction from wages – an employer may only deduct wages as required or permitted by this Act or other legislation eg. income tax, CPP, EI
• termination of employment including rules about notice – an employer may terminate an employee if sufficient written notice or compensation in lieu of notice is provided
• severance pay – not required if employee quits, retires, or is terminated for just cause