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Do you use employment agreements?

If not, why? If so, when do you use them and what do you include? Join the debate on the use of agreements to limit reasonable notice in dismissals without cause

By Stuart Rudner

This post is more of a poll, and I am hoping to hear from readers about their practices.

Those who follow my writings and presentations have heard me say, repeatedly, that I recommend every employee be asked to sign a contract of employment that, among other things, sets out their entitlement to notice of dismissal without cause.

I will not review the reasons for this recommendation at this time. However, I know that in my practice and when I speak with people informally, I am met with a number of concerns. Some of them include the following:

•employees are scared away by legal documents (especially if they are more than one or two pages)

•the company does not want to be perceived as too oppressive

•employment agreements are only necessary for managers or executives

•employment agreements are not enforceable anyway, particularly clauses regarding dismissal

•everything is addressed in our policy manual

•we don't have time to draft a contract every time we hire someone.

Most, if not all, of these objections can be rebutted. I find it particularly interesting that many employers are sensitive to presenting lengthy contracts of employment and often insist they be limited to one or two pages. They often do so despite the fact it means they will not be protecting the organization as well as they could. I have yet to have a client tell me, in no uncertain terms, they missed out on a good candidate because of the form of contract they presented.

The only other objection I will comment on is the concern about being perceived as oppressive. While some people assume a contract of employment will provide for the absolute minimum amount of notice in the event of dismissal without cause, that does not have to be the case. The parties are free to negotiate a reasonable termination clause. What they will gain is certainty. In the absence of such a clause, the employee will be entitled to reasonable notice in the event of dismissal and, as readers will know, this is a vague concept with results that are often difficult to predict with certainty.

Please leave a comment and let me know if you use employment agreements, when you do so, what you include or don’t include, or any other comments or concerns that you would like to share.

Stuart Rudner is a partner in the Labour & Employment Law Group of Miller Thomson LLP, a national law firm. He provides clients with strategic advice regarding all aspects of the employment relationship, and represents them before courts, mediators and tribunals. He is author of You’re Fired: Just Cause for Dismissal in Canada, published by Carswell. He can be reached at (905) 415-6767 or srudner@millerthomson.com. You can also follow him on Twitter @CanadianHRLaw and join his Canadian Employment Law Group on LinkedIn.

Stuart Rudner

Stuart Rudner, Employment Lawyer and MediatorStuart Rudner is the founder of Rudner Law (RudnerLaw.ca), a firm specializing in employment law and alternative dispute resolution. He is a senior employment lawyer, mediator and arbitrator. He can be reached at stuart@rudnerlaw.ca, (416) 864-8500 or (905) 209-6999, and you can follow on Twitter @RudnerLaw.
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  • Sometimes less can be more!
    Thursday, May 31, 2012 2:29:00 PM by Stuart Rudner
    Fair point, Tim. Contracts should be drafted carefully.
  • Minimum standards
    Wednesday, May 30, 2012 12:24:00 PM by Stuart Rudner
    Thanks for the comments. In previous posts I have discussed some of the requirements for an enforceable dismissal clause. One is that the terms meet the minimum requirements of the applicable legislation. The clause can be more generous, but not less.