Do your employment contracts contain this mistake?
If you’re moving to dismiss a long-time worker, it’s important that their employment agreement is up to date – otherwise you might have to pay out much more notice than you expected.
A legal expert says employers too often try to enforce a years-old termination clause, only to find that it’s so out of date that the worker is entitled to much more than what the Employment Standards Act prescribes.
“Never make the mistake of offering a substantial raise or significant promotion without having them sign a new contract,” says Muneeza Sheikh, a partner at Levitt LLP Employment & Labour Law.
“What I see happening time and time again, despite the conversations that I have with my employer clients, is you end up with a scenario where the substratum of the contract has diminished by the time the person’s fired. There’s so many inaccuracies in terms of what the contract says, dated from many years ago, versus what the person is actually doing at the time that they’re terminated.”
In those circumstances, she warns, “a contract simply wouldn’t be enforceable”.
If a court finds the employee is entitled to a severance package in line with common law, that can be much more substantial than their employer anticipated – or perhaps than they can afford.
Any time there’s a substantial change in an employee’s pay or title, their contract should be updated – and Sheikh says employers shouldn’t shy away from running the changes past a lawyer.
“Don’t put yourself in a situation where you’re guesstimating what you should do – it’s just not safe.”