Table Of Contents
- Introduction
- Establishing the Employment Relationship
- Impact of Statutes
- The Nature Of The Contract
- Ancillary Documents
- Changing the Terms Of The Contract
- Keeping the Contract Current
- Suggested Contract Terms
- Whole Agreement
- The Probationary Period
- New Employees - "Status"
- Moonlighting
- Contract Team
- Termination for Legal Clause
- Notice of Termination For No Legal Clause
- Post Termination Remuneration
- Confidentiality
- Non-Competition
- Mediation
- Conclusion
- Schedules
- Schedule i) - Employment Letter
- Schedule ii) - Confidentiality Clause
- Schedule III) - Non-Competition Clause
A. Introduction
Employers are using written employment contracts more and more, and for good
reason. The increasing complexity of employment law and the high costs of termination
have forced employers to be more careful when they establish new employment
relationships. While no contract can address every potential issue, there is
much to be said for dealing with the most likely areas of future disagreements,
before the problems exist.
Giving consideration to a written employment contract means that the employer
has reviewed the key aspects of the job in advance: duties and responsibilities,
remuneration and benefits, how to the end the relationship, if necessary, and
what obligations continue even after termination. This paper is designed to
highlight some important concepts that may assist an employer who is wondering
whether or not a written contract is needed, and if so, what should be included.
Even though each relationship will be unique, there are common elements which
should always be considered.
In the unionized environment, collective bargaining means that one contract
will apply to all bargaining unit members, and so individual contracts of the
type described below are not applicable. However, even the union shop has managers
and sometimes sales and office staff who are not covered by the Collective Agreement
and for whom individual employment contracts may be helpful.
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B. Establishing the Employment Relationship.
Whenever an employee agrees to work for an employer, a contract is established:
it will either be verbal or written. There are three elements to the contract:
offer, an "acceptance", and consideration. Consideration typically takes the
form of a promise by the employee to perform services in exchange for the promise
by the employer to pay for such services.
There is nothing illegal about a verbal contract however, its terms are significantly
more difficult to prove in the event of a dispute. For example, consider the
situation where an employee under a verbal contract is entitled to 3 weeks'
vacation per year. Is she entitled to vacation during the first year, or only
after 12 months of employment? If the employer and employee disagree, there
will likely be hard feelings or disappointment one way or the other. Claims
for wrongful dismissal after termination are based on the concept of reasonable
"notice" or "pay in lieu of notice". Courts imply a term into the oral contract
that a reasonable period of notice must be given, and the question arises as
to what is reasonable in the circumstances of each case. If the contract is
in writing, and those issues are addressed, there is no room for disagreement.
One is well advised to ensure a proper account of the respective rights and
responsibilities of each of the parties to avoid potential future problems.
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C. Impact Of Statutes
Part of the complexity of employment law these days is the impact of a variety
of statutes on the private employer/employee relationship.
While the prohibited grounds of discrimination may vary between the jurisdictions,
most statutes such as the Ontario Human Rights Code prevent discrimination based
on a familiar list of factors including race, religion, colour, nationality,
ancestry, place of origin, age, sex handicap, marital status etc... Most jurisdictions
recognize by way of statute or judicial interpretation the concept of "bona
fide occupational qualification" or a requirement which may constitute a preference
for or against a particular characteristic protected by human rights legislation.
Generally speaking, where an employer has fulfilled a duty to accommodate the
member of the "protected group", the requirement may be excused from the operation
of the legislation where the preference is in good faith, and relates directly
to the actual requirement of the job.
The Employment Standards Act provides a minimum statutory floor for levels
of pay, vacation, daily breaks, notice periods on termination, pregnancy and
parental leaves as well as maximum hours of work. For Federally regulated employers
in areas such as interprovincial transportation, shipping, banking, communications,
and railroads, the Canada Labour Code parallels the Ontario legislation, but
with important distinctions in some areas, such as matters of unjust dismissal.
In theory contracting out of the Provincial and Federal minimums is prohibited,
however the scope and form of the prohibition on contracting out varies from
jurisdiction to jurisdiction. The employment contract must be "legal" in that
it cannot provide benefits at a level that is below the Provincial or Federal
minimums, should the provision fall under judicial scrutiny in the event of
a dispute, the provision will certainly be deemed invalid and unenforceable.
Some change is occurring in the law, such that if the employee agrees to accept
a bundle of benefits which exceeds the same bundle under the Employment Standards
Act, the provisions of the contract will prevail even though individual elements
may be less than the legislated minimum.
A prudent employer will make sure that the draft contract terms do not run
afoul of any statutory provisions. Doing so will avoid the unpleasant potential
of discovering later that some parts are invalid, and that the door is opened
up to financial claims by the disgruntled employee.
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D. The Nature Of The Contract
The mention of employment contracts conjures up a picture of complex, multi-paged
documents, full of legalese, and small print. In complex relationships, that
type of document may be appropriate. Practically, written contracts will not
find favour with most employers (particularly in small business) if they are
too complicated. The answer is to tailor the contract to your particular needs.
The contracts can be simplified into the form a letter of employment. In plain
easily understood language, the employer can spell out the job terms to the
new employee and ask that a copy of the letter be signed by the employee, indicating
his or her agreement with its content. The letter (a sample of which is attached
as Schedule (i) to this paper) can be customized from one employee to another
with ease.
Once signed, the document becomes part of the employee's file to be relied
on later, if necessary (by either party). Some standard subjects to address
in the letter (or more formal contract) are set out below:
Where a written contract/letter of employment has been contemplated but not
signed, the authorities indicate the agreement will be enforceable if the conduct
of the parties shows that their clear intent was to enter into a firm agreement.
Whatever its form, if the wording is clear and the contents consistent with
legislative requirements, the Court will tend to uphold the document as a valid
record of the parties' intentions at the time commence of the employment relationship.
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E. Ancillary Documents
To keep the contract simple and flexible, it is desirable to provide for some
items by way of reference to additional material, such as a benefit booklet,
or policy manual.
Specific policies and requirements such as hours of work, attendance expectations,
and systems of progressive discipline, are often set out in employee policy
manuals, as are benefits such as paid bereavement or sick leave provisions.
A contract would be unduly long and complex if all those items were to be included
in the document. The same consideration applies to benefit plans provided by
a third party insurer, such as long term disability, life insurance, and major
medical coverage.
One possibility is to attach the items as schedules to the employment letter,
but a more flexible approach is to refer to the documents in the letter, and
thereby incorporate their terms by reference. It is of particular importance
to include a provision that the policies or benefits are subject to change,
and that to do so will not be considered grounds for terminating the contract
(i.e. constructive dismissal). In the absence of such a clause any changes to
a policy manual made after the commencement of employment may not apply unless
there is proper notice to the employee and a clear intention of the parties
to alter the terms and conditions of employment accordingly.
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F. Changing the Terms Of The Contract
An ongoing employment relationship which is not designed to terminate after
a fixed term is the norm in the workplace. Rarely does the employment contract
with the original bargain remain unchanged throughout the entire relationship.
Once signed, the employment letter usually disappears into the file, not to
be referred to except in situations of some disagreement.
During the course of the relationship, there may be reasons to change the
terms, for the benefit of either or both the employee and the employer. Pay
rates can change, benefit coverage may be adjusted, job duties may be revised,
etc.. Ideally, these changes should be tied in to the original employment letter:
the letter should provide for the possibility of changes from time to time,
and the changes which do occur should be identified as amendments to the original
agreement.
Major changes that have a negative impact on the employee or create a significant
change to the job should be made on notice, with the most important changes
requiring a longer notice period. Typically, the opposite occurs: changes are
made unilaterally or on very little, if any, notice. To do so runs the risk
of eroding employee morale, not to mention the possibility of claims for constructive
dismissal if the way was not sufficiently paved in the written contract.
Any amendment or renegotiation of the contract after the commencement of employment
may be unenforceable for lack of consideration. The leading authority in this
area is Francis v. Canadian Imperial Bank of Commerce. The plaintiff was hired
by the Bank after receiving a letter offering employment dated June 9, 1978.
The offer was subject to satisfactory reference from the Plaintiff's previous
employer. The Plaintiff accepted the offer on the terms and conditions as set
out in the offer and a letter of reference was provided prior to the commencement
of employment. The letter contained no provisions with respect to termination
of employment.
On July 4, 1978 the Plaintiff commenced work and was required to sign an "Employment
Contract" which provided that employment could be terminated without cause upon
giving one month's notice for each completed year of service, up to a maximum
of three months' notice. After eight years of employment, the Plaintiff received
a letter of termination for cause after allegedly contravening acceptable banking
procedures and irregular lending practices, with no further particulars of the
allegations. The allegation of cause was withdrawn before trial and the Employer
sought to rely upon the notice provision in the employment agreement.
At Trial it was held that all the essential terms of the employment contract
between the Plaintiff and the Bank were set out in the offer of employment of
June 9, 1978, and the acceptance of June 15, 1978. The "Employment Contract"
could not "operate so as to limit the implied term of reasonable notice to which
the Plaintiff was entitled at common law under a contract of employment of indefinite
duration." Hoilett J. specifically stated:
It has been long recognized in the jurisprudence that one party to an agreement
cannot unilaterally attach to an existing agreement a term diminishing the rights
of a party already established under that agreement.
The Defendant appealed. The primary issue on appeal was whether the "Employment
Contract" was a valid and binding agreement which varied the implied term of
reasonable notice on termination implied at common law. The Court of Appeal
upheld the decision at trial that the contract for employment had been established
by an initial exchange of the offer of employment and that there was no additional
consideration to support the variation of the existing agreement. The majority
decision stated:
The principle that new or additional consideration is required to support
a variation of an existing agreement, was recognized by this court in the context
of an employment relationship in Scott v. Merit Investment Corp.
........
The consideration for the "Employment Agreement" signed by the plaintiff is
stated in the document to be the employment of the plaintiff by the bank. The
bank was already bound to employ the plaintiff as a result of the exchange of
correspondence and the fulfillment of the condition of a suitable reference.
........
The general principle that a modification of a pre-exiting agreement will
not be enforced unless there is a further benefit to both parties, as opposed
to only unilaterally benefiting one of the parties, may be subject to some important
qualifications
........
Waddams suggests that the law in Commonwealth countries is moving slowly toward
the American position of protecting promises which modify an existing duty to
the extent that there has been subsequent reliance on them by the person in
receipt of the promise.
........
Consideration of whether there has been reliance by an employer on an employee's
promise also appears to be of significance in employment law. In Wallace v.
Toronto-Dominion Bank, Robins J.A., noted that the provisions concerning notice
on termination were continuously in the bank's personnel manual and that the
plaintiff's attention was specifically directed to them with knowledge of the
bank's intention that those terms remain in operation throughout employment.
Madame Justice Weiler writing for the majority concluded:
In the present case, Hoilett J. found that the "Employment Agreement" was
never referred to by the bank during the course of the plaintiff's employment.
It is clear that the bank did not subsequently rely on this clause in the contract
in its dealings with the plaintiff.
...therefore, Hoilett J. was correct in his conclusion that the "Employment
Agreement" dated July 4, 1978, was not biding on the plaintiff. I would therefore
I would dismiss the appeal on this point. I would add that, in cases such as
this, employers are able to incorporate the terms of a standard employment agreement
into the original contract of employment by saying in their offer of employment
that the offer is conditional upon the prospective employee agreeing to accept
the terms of the employer's standard form of agreement, a copy of which could
be enclosed with the offering letter.
Case authorities clearly indicate that employment contracts negotiated after
the commencement of employment may be unenforceable for lack of consideration.
"New" consideration in these circumstances may take the form of a promotion,
pay raise, bonus, stock options etc... It is advised that employers take caution
against such consideration being characterized as a gain which would have been
received notwithstanding the negotiation of the new contract.
In a unionized situation, parties sometimes assume that the agreement, once
bargained for and ratified, cannot be changed until the end of its term. Generally,
that proposition is correct. However, there may well be situations where during
the currency of the Collective Agreement, the union and employer are able to
agree on amendments to be effective immediately, at least until the contract
ends and a further round of negotiations is undertaken. For example, serious
financial matters that negatively affect the employer's profit such as the loss
of a major customer or changes in government regulations may require the parties
to re-think their previous positions. In those situations, a "letter of understanding"
may be entered into which has the effect of modifying the Collective Agreement,
and which can be relied on by either party if a grievance is subsequently filed.
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G. Keeping the Contract Current
For it to be of any use, the contract must be able to stand judicial scrutiny;
that is, it must be viewed as valid by the Court when raised as a defence by
the employer to an employee claim, for example, after a termination. Dusting
off an ancient agreement that has had little attention paid to it - the "bottom
of the drawer" agreement - may not meet with judicial approval if it no longer
reflects the nature of the employment relationship. If an entry level employee
agreed, 20 years ago, to a minimal amount of notice on termination, that same
employee who is now a highly paid vice-president of operations will not likely
be held to the same terms.
Ideally, the contract should be reviewed periodically, and particularly when
any significant job change occurs so that it can remain fresh and an accurate
statement of the parties' expectations.
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Suggested Contract Terms
Some job terms are so basic that they hardly need comment: the employee's
title, rate of pay, duties and responsibilities, and line of supervision, are
a few such items. However, just because they seem obvious is not a good reason
to omit listing them in the employment letter: a failure to do so may create
ambiguity and problems later.
Other terms are less obvious, but are probably still assumed. Identifying
them in the contract will make expectations clear. Examples are the employee's
obligation to make a full time commitment to job duties, and a statement that
the employment contract constitutes the entire agreement (i.e. that there are
no collateral promises upon which either party is relying).
A third category of items for consideration to be included in the contract
are those that are specific to the arrangement, such as the terms of termination
by either party, a definition of legal cause for dismissal, non-competition,
confidentiality, and the length of the contract term.
If a fair and well drafted contract is an aid to establishing a good employment
relationship, a thoughtful review of the issues in advance is the key to a good
contract.
(i) Whole Agreement:
It is surprising how often, if the employment relationship goes bad, one party
or the other relies on representations made at the time the employment relationship
began. A promise of an ownership interest, a promise of a raise in pay, or an
expectation of a promotion within a certain time, are all examples. It is not
unusual for there to be a certain amount of optimistic expression made by both
parties prior to entering the employment relationship. However, excluding them
from the contract by a specific term indicating that there are no collateral
representations or agreements, and that the terms of the letter constitute the
entire agreement, help prevent those issues being raised later.
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(ii) The Probationary Period:
The tendency is to consider the recruitment process ended once the hiring
takes place. Attention then turns to training the new employee, and to the basic
issues of operating the business. To do so is to forget a very powerful tool
available to minimize risk to the employer, namely the probationary period.
A careful review of the employee and her performance in the job situation
can reveal much more information than may have surfaced in the application and
interview process. How is she relating to other staff? Are there any signs of
inadequate job performance or inability to perform as instructed? Are there
concerns about a "me first" attitude to the job? These could all be warning
signs of problems to come.
The employer's power to affect the employee is never greater than during the
first few weeks and months of employment, and so it is advisable for the employer
to use that power to its advantage. No one should be hired except on a probationary
basis. The Employment Standards Act does not create a probationary status for
employees but states that no minimum notice is required for employees with less
than 3 months service. This permits a "probation period" of 90 days (which can
be renewed for another 90) before the need for termination pay and other responsibilities
arise. The probationary period should be standard in every case, and in fact
there is no need to restrict it to the Employment Standards minimum. Probationary
status can be extended where expectations are not being met.
A probationary period will not be implied into a contract of employment and
automatically imposed on the employer. The Employer must take care to ensure
that the terms of the probation period are clearly stated in the offer of employment
and agreed to before the employee commences her employment. Providing for the
probationary period in the initial contract of employment clarifies expectations
and builds in an opportunity for the employer to correct behaviour or terminate
the relationship at an early stage.
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(iii) New Employee - "Status"
A clause clarifying the particular status of the worker as an employee or
independent contractor and parameters of the working relationship with the employer
can provide the parties with many benefits. The characterization must clearly
reflect the reality of the relationship and the employees position vis a vis
the employers operations. Ambiguity may result in the courts/or Revenue Canada
attacking the provisions despite the intentions of the parties. Proper characterization
and clarity is also important due to the many taxation as well as statutory
and common law rights and obligations.
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(iv) Moonlighting:
Depending on the nature of the job, results may be the only measure of success
(in a sales capacity, for example) rather than time spent working. However,
the job may well require time to be devoted outside of regular working hours,
and if there is an expectation for extra commitment, it may be appropriate to
prohibit part- time employment in some other employment relationship as part
of the duty to commit to full time employment in the new position.
Such restrictive covenants are rigorously examined by the courts as a result
of the employee's inequality of bargaining power vis a vis his or her employer.
In drafting such clauses, the Employer must be careful to strike a balance between
the two primary competing considerations: the right of every individual to earn
a livelihood and pursue opportunities in an effort to advance their career versus,
the right of employers to protect their legitimate business interests and not
to be harmed by the misuses of its proprietary or confidential information.
If an Employer wishes to impose a restrictive covenant such as that regarding
moonlighting which is enforceable, that covenant must: (1) protect a legitimate
propriety interest such as a trade secret or trade connection; (2) the restraint
must be reasonable (the use by an employee of general skill and knowledge cannot
be restrained); (3) not be used to solely preserve the employer's competitive
advantage (covenant's whose object is solely to prevent competition are void).
There is ample support in the case authorities to suggest that a restriction
on an employee's right to alternative employment is reasonable and within the
employer's right to establish where (1) alternative employment would inhibit/interfere
with productions; (2) the employee has access to particular information which
if imparted to a competitor would harm or damage the employers business; and
(3) there exists a form of employer/employee fidelity.
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(v) Contract Term:
Although the typical employment relationship is for an indefinite duration,
it is advisable to consider whether or not to impose a specific term, such as
one or two years, with an option to renew. This is especially true in situations
where the need for the position in the future is not clear, or if there is some
question about ongoing funding. Even where expectations are for an unlimited
duration, it is wise to consider an annual renewal of the contract, perhaps
in conjunction with an annual performance review in order to keep the contract
current with the changing terms of the relationship.
If the employer chooses to impose a specific term, it is important to diarize
and follow through with a written renewal or extension of the term, lest it
expire and the employee continue to work under what would then become an oral
contract.
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(vi) Termination for Legal Cause:
Courts have defined legal cause as being the most serious types of employee
misconduct or non-performance which go to the root of the employment relationship.
In situations where legal cause exists for termination, an employee can be dismissed
with no notice and no pay in lieu of notice since the employee has brought the
termination upon himself. The Courts recognize only the most serious forms of
employee misconduct as legitimate legal cause for dismissal. For example, stealing
breach of trust, serious insubordination and gross incompetence etc...Short
of conduct which goes directly to the heart of the employment relationship,
Courts will find "no legal cause" even though ample business cause for termination
may exist.
It may be that the employer wishes to expand the definition of legal cause,
for example, to a situation where sales fall short of a required target by a
certain percent, or where by some other objective measure, an employee has failed
to fulfil the specific terms of employment. If the definition of "termination
for cause" is to be redefined, it should be set out clearly in the agreement.
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(vii) Notice of Termination For No Legal Cause:
Both the employer and the employee will likely be optimistic about the success
of the relationship when it first begins. Despite that natural tendency, it
is in both parties' interest to address the issue of the end of the relationship
so as to prevent misunderstandings with the potential for costs and aggravation
from occurring later. If the employee is to give notice of her or his intention
to depart, that notice should be set out and may increase depending on the individual's
length of service with the employer.
Where an Employer wishes to terminate employment where no legal cause can
be established, the legal issue is: how much advance notice (or pay in lieu)
should an employee receive? The issue arises from the implied term in the oral
employment agreement that the employer must give reasonable notice in advance
of the termination.
The Employer should ensure that there is a specific calculation in advance
as to the amount of notice or pay in lieu of notice that will be provided to
the employee. This notice period should be adjustable to reflect an increasing
length of service and promotion to and through the ranks of management. Using
the same criteria that Courts rely upon will help satisfy the Courts that the
agreement is reasonable, even if the amount of notice or pay in lieu of notice
is not identical to that which Courts would otherwise award. In no case should
the amount agreed upon be less than the statutory minimums provided by the Employment
Standards Act (or the Canada Labour Code for Federally regulated employers).
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(viii) Post Termination Remuneration:
Where an employee is paid on a basis other than regular salary, such as commission,
bonus, deferred profit sharing, etc., there should be a specific reference to
how final remuneration will be paid if the employment agreement ends. For example,
does a sales person receive all commissions on jobs written to the date of termination
even if the payment by the employer from the customer is received later? Similarly,
will an employer be obligated to make a bonus payment to the terminated employee
if the bonus is payable after the employment terminates? Setting out these matters
when the agreement begins will make them easier to deal with since both parties
are attempting to create a positive relationship rather than leaving the discussion
for a later time when the relationship is ended.
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(ix) Confidentiality:
The confidentiality clause is of particular importance in businesses where
there are special processes or products, the knowledge of which gives the employee
a significant amount of power.
It is an implied term of all employment relationships that an employee will
serve her employer with loyalty and good faith. As a result of this duty, an
employee is obliged to maintain the confidentiality of information acquired
in the course of employment. However, an employee at the end of the employment
relationship is free to take general knowledge and skill obtained during the
course of the relationship and apply it to future employment endeavors.
The primary characteristic of information that is likely to be protected by
the courts as confidential in nature appears to be that there is some aspect
of novelty about the information and that it is not generally known and public
knowledge. Where ever there is a use of confidential information, an employer
may have a cause of action for either breach of confidence and/or breach of
fiduciary duty. The particular cause of action will depend on the status of
the particular individual using the information.
The problem is particularly acute where a key player in the business, such
as sales or marketing manager, or production supervisor, leaves the employer
and takes his knowledge gained as to the employer's method of operating and
customer lists, etc. to a competitor. While the common law provides the employer
with some protection against the use of confidential information by imposing
general duties of good faith and fidelity, an employer achieves greater protection
from the potential misuse of confidential information by requiring an employee
to sign a confidentiality agreement are including such a clause in a general
contract of employment.
By using such a clause or agreement the employer may specify the information
that is considered confidential and the particular status of the individual
subject to the clause/agreement. In this manner a written contract which includes
a confidentiality clause prevents the future disputes such as the status of
the individual as an employee or fiduciary and provides evidence or support
should a dispute arise.
If the Court is satisfied that the employer and the employee turned their
mind to the issue of confidentiality at the time of formulating the contract,
it will normally accept that there is a confidential relationship which the
employer has a right to protect.
A sample clause is included as Schedule (ii) to this paper.
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(x) Non-Competition:
The general common law rule is that any non-competition covenant being a contract
in restraint of trade is contrary to public policy and is prima facie unenforceable.
This rule has been relaxed in more modern times, and the courts now balance
the interests of the community in maintaining freedom of trade against the interests
of the employer in having adequate protection. In order for such a covenant
to be enforceable it must not only be reasonable with respect to the interests
of the parties but must:
- protect a legitimate proprietary interest (trade secret, confidential information,
client base/connections);
- must be reasonable with respect to duration and geographic scope.
Non-competition clauses are viewed quite skeptically by Courts so as not to
prevent people from carrying on their livelihood. However, if the non-competition
clause is drafted to protect the reasonable interests of the employer within
a geographic area where the employer would normally be trading, and for a reasonable
period of time, the restriction will likely be upheld by a Court. The issue
of reasonableness is the key in each case. For example, defining the reasonable
duration of a restrictive covenant could be based on the time that the employer's
customer connections could reasonably be expected to endure.
By way of illustration, if an employer's trading area is within the Niagara
Peninsula, it would be unreasonable to restrict a former employee from competing
outside that area. As well, if, for example in the insurance industry, policy
renewals happen annually, it would be unreasonable to attempt to restrict competition
for much beyond one year. A sample clause is included in Schedule (iii) of this
paper.
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(xi) Mediation
The principle advantage to providing a mediation clause within the very terms
of an employment contract is that the parties are required by the terms of such
a clause to first explore and exhaust mediation before premature escalation
of a dispute and resorting to formal, expensive and lengthy legal proceedings
and the consequent lasting harm to the relationship.
If properly drafted, an alternative dispute resolution clause inserted in
the agreement will facilitate the speedy resolution of disputes. In theory,
the earlier the concept of negotiation or mediation is introduced, the greater
its chances of success, and the more the objectives of relationship protection
and cost minimization are promoted.
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I. Conclusion
In general terms, a written contract of employment, in letter form or otherwise,
will be enforceable by both parties if it is fair. Assuming that the contract
is entered into at the beginning or at some other key point of the employment
relationship where both parties had an opportunity to consider its terms and
seek advice if required, and if the contract has been kept current, it will
represent the single biggest protection that an employer can provide its against
claims that may arise when the employment relationship, for whatever reason,
sours.
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SCHEDULES
Schedule i)
[DRAFT] Employment Letter
[Date]
[Name of Employee]
[Address]
Dear Mr./Ms. [Name Of Employee]
Confirming our recent discussion in this office, we are pleased to confirm
our offer of employment and your acceptance on the terms set out below.
You will begin work with us on [Date] as [Job Title].
Your responsibilities will be to [Brief Description of Duties]. Your direct
supervisor will be [Name and Title].
It is important to both of us that during your initial period of employment,
your ability to perform your duties be carefully assessed. Accordingly, we have
agreed that the first [Ninety] days of employment represent a probationary period,
during which either you or we may terminate your employment for any reason without
notice and without the payment of any further benefits.
Because the job requires a full time commitment, you have agreed to work the
hours required, which may vary from time to time, in order to meet the objectives
of your position.
In anticipation that the job may evolve, over the course of time, you have
agreed that your duties, responsibilities, reporting relationships and the location
of your employment may be changed by the company from time to time, and that
these changes will not affect or change any other part of this agreement, nor
constitute the basis for a claim of constructive dismissal on your part.
Your salary will be paid [Bi-weekly] on the basis of [Amount] per year. In
addition, you will be entitled to participate in those benefit plans made available
by the company, and you can secure further information as to the current benefits
by having reference to the benefit booklet, which is enclosed. Holiday, vacation,
time off, and other related benefits will be in accordance with the company
policy set out in the manual, a copy of which is accompanying this letter. The
salary and benefits may change from time to time without affecting the other
terms of your employment.
It is always difficult to consider termination at the beginning of a new relationship.
However, having clear termination provisions provides security to both you and
the company. Your employment under this agreement may be terminated after the
completion of your probationary period, and any extension thereof, by you on
the giving of [Amount] weeks' notice to the company. The company may waive the
notice in whole or in part. If the company deems it appropriate to terminate
your relationship, it can do so after the completion of the probationary period
on giving you notice in accordance with the requirements of the Employment Standards
Act of Ontario, which currently provides two weeks up to two years of service,
and thereafter one week per year of service, to a maximum of eight. At its option,
the company may give you pay in lieu of notice.
We confirm that this letter constitutes the entire agreement between us with
respect to your employment, regardless of any informal discussions that may
have taken place during the hiring process.
We look forward to your joining the team here at [Name of Company], and to
working with you in the future.
Enclosed is our standard agreement regarding confidential information. Please
return the confidentiality agreement, as well as a signed copy of this letter
as soon as possible.
Yours very truly,
[Company Name]
Per:
________________________
I have read, understood and agree with the foregoing. I accept employment
on the above terms and conditions.
DATED the day of , 19 .
________________________
(Signature of employee)
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Schedule ii)
[Draft] Confidentiality Clause
I acknowledge that in the position of [Job Title] as an employee of [Name
of Company], and in any other positions that I may hold in the company, I will
acquire information about certain matters which are confidential to the company,
and which information is the exclusive property of the company, including but
not limited to:
- information about the design and production of product;
- information concerning pricing and marketing policies of the company;
- information concerning the names, addresses and preferences of the company's
customer list;
- names and addresses of suppliers of the company, and prices charged by suppliers.
I acknowledge that the information referred to above could be used to the
detriment of the company in a competitive situation. Accordingly, I undertake
to treat confidential all information, and agree not to disclose it to any third
party either during my employment (accept as may be specifically authorized
or as necessary to properly perform the duties required of me by the company),
or after the termination of my employment for any reason, except with the written
permission of the company.
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Schedule iii)
[Draft] Non-Competition Clause
I [Name of Employee] acknowledge that as [Name of Position] for the [Name
of Company], I will gain a knowledge of and a close working relationship with
the employer's customers, and receive other information as to the company's
products, pricing, and methods of doing business, which would injure the company
if made available to a competitor or used for competitive purposes. I agree
that for a period of [Twelve] months from the termination of employment with
the company for any reason or cause, I will not be employed by another employer
engaged in a business which is in competition with the employer, in a position
the duties of which are the same or similar to those duties performed for the
company pursuant to this agreement, nor will I set up business in competition
with the company in similar circumstances.
The foregoing relates to the geographical region within a one hundred kilometer
radius of the head office of the company at [Place], Ontario..
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