For many years, large companies have typically put signed employment contracts in place with their senior executives. But now, savvy businesses of all sizes are seeing the wisdom of formalizing their relationships with not just top executives, but also with middle managers, sales people who have contact with customers or clients, and even supervisors who may be privy to proprietary information about how products are manufactured.
A written employment contract is a legally binding document signed between you and your employee setting forth the terms of the relationship.
Employment contracts are beneficial to the employment relationship for several reasons:
- Providing your employees with a written employment contracts allow you and your employees to clearly set out your expectations for their employment.
- You can limit your liability considerably by creating employment contracts. Courts are very reluctant to interfere with terms of a binding contract.
- Employment contracts allow the employer to specify the details of the employment, allowing the employer to maintain an organized and structured working relationship.
- Employers and employees have the ability to negotiate the terms of the contract, making for a positive relationship between the employer and employee.
Written employment agreements can cover important areas such as:
- Compensation and benefits (such as health insurance, disability, dental, vacation etc.)
- Duration of employment
- Grounds for termination
- Incorporation of employment policies
- Non-solicitation and no-compete clauses
- Procedures for resolving workplace disputes
- Intellectual property ownership
Written contracts will be particularly useful in situations where an employee will be privy to confidential information about your business. A confidentiality clause ensures that an employee is legally prevented from disclosing information, or using company information for his or her benefit. If an employee breaches your employment contract you will be legally entitled to redress.
Why Choose Levitt LLP?
The process of creating an employment contract can be daunting and complicated. Employment contracts must follow statutory guidelines and should be carefully reviewed by a lawyer to ensure the contract is binding and enforceable. If there is a change to an employee position, the employment contract should be updated.
When it comes to drafting and negotiating general employment contracts, as well as executive employment contracts with unique terms and conditions (such as enforceable non-compete and non-solicitation restrictive covenants), no one understands the issues better than we do.
Let us work with you to determine the most appropriate contract for your particular business. Each situation is unique; so talk with us to learn about how we can help you reduce the HR risks in your organization. There are many evolving defences to the enforceability of those contracts.
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