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Employment contracts: Getting existing staff to sign one • Lying on a resume

Employment contracts: Getting existing staff to sign one

Question:
Many of our company’s existing employees are employed without an employment contract. What issues should I be aware of when deciding whether or not to ask these employees to sign a contract that would provide some clarity with respect to issues such as hours of work, termination and severance?

Answer: The employment relationship is a contract. Whether the terms of the contract are written or oral, they are equally binding and enforceable. Some employers incorrectly believe that, in the absence of a written contract, there is no employment contract. Every employment relationship has at its root a contract of employment, whether or not it is in writing.

An employment contract can be entirely in writing, or entirely oral, or partly written and partly oral. An employer will often hire an employee and document the hiring with a letter that welcomes the employee to the organization, states the position and remuneration, but fails to address issues such as the benefits or the notice the employee will be entitled on dismissal.

This offer of employment constitutes the written contract between the parties, while issues not covered within the letter but discussed during an interview may constitute the oral portion.

The danger is, in the absence of a written contract that clearly enunciates all of the terms, the law must search elsewhere to determine the parties’ rights and obligations.

The parties who do not take the time to reach a written agreement may find the courts will fill the void by implying certain terms into the employment relationship. How a court does this may or may not reflect what the parties intended.

Consider the situation where an employee under a verbal contract is entitled to three 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.

Assume this disagreement results in the employee’s termination and a subsequent action for wrongful dismissal. 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 and no room for judges to imply the contractual terms they feel are just.

Therefore, from both the employer and employee’s prospective, oral agreements should always be put in writing. Ideally this should happen prior to the start of the employment relationship. If the employment agreement is executed after the employee has started working it may not be enforceable due to a lack of consideration. In such circumstances courts have held that continued employment may be sufficient consideration to allow for the validity of the contract where there has been express or implied forbearance on the part of the employer from terminating the employment of the employee for a reasonable period of time. Accordingly, if you are seeking to implement employment agreements after an employee has already commenced working, you should contact a lawyer to get advice with respect to the enforceability of such an agreement.



Lying on a resume

Question:
Does an employer have just cause for dismissal if he discovers a new employee lied on his resume?

Answer: Lying on a resume or in a job interview is not necessarily cause for dismissal without notice. It will depend on the nature of the lie, and the impact the lie had on the hiring process.

For obvious reasons it is more likely a major misrepresentation will constitute just cause than a minor misrepresentation. Similarly, a misrepresentation as to a fact relevant to the employment will be more likely to constitute just cause than a misrepresentation which is unconnected to the employment.

In other words an employee who claims on his resume to have a business degree when applying for a senior position with a marketing company when in fact he only has a high school diploma may, in most circumstances, be dismissed with just cause provided that holding a business degree is requisite to the position. On the other hand an organization may not have just cause to dismiss in the case of an employee who claims fluency in French on her resume but in fact has only a basic grasp of the language, particularly if French fluency is not a crucial skill for the job.

In order to have just cause the employer must show the employer relied on the misrepresentation in the resume in making the decision to hire the new employee, and that this reliance was reasonable. The misrepresentation must therefore be connected to the qualifications the employer had in mind when recruiting for the position. It must also be a believable misrepresentation, which should not have raised the suspicions of the employer. For instance an applicant’s gross exaggerations about his value to an earlier employer may be simply unbelievable, and the employer would not be justified in relying on these statements.

Some employers try to protect themselves from misrepresentative resumes by asking new employees to sign a form stating that all representations on their resumes are true, and that a false statement may be grounds for immediate dismissal. This agreement will assist employers in establishing just cause for dismissal, although it may not be sufficient if the misrepresentation is minor and irrelevant.

Peter Israel is the head of Goodman and Carr LLP’s Human Resource Management Group. He can be reached at (416) 595-2323 or [email protected]. Address questions to [email protected].

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