Considerations include work location, vacation time and temporary layoffs
Can you think of one way in which the COVID-19 pandemic changed the way you manage your workplace, whether you are the owner, manager or HR representative?
I am sure you can think of more than one example. After all, the pandemic brought changes to employment laws time and time again, as you navigated unfamiliar terrain and tried to ensure the organization was not inadvertently exposed to liability.
In this article, I outline some strategic and practical considerations when drafting and implementing employment contracts, especially in light of the COVID-19 pandemic. This is not meant to be exhaustive, but is intended to provide some guidance so you can make informed decisions.
General principles
Let's start with a general principle of contract law: there must be an offer, acceptance, and consideration in order to form a binding contract.
For new employees, the consideration offered at the outset of the employment relationship is typically the offer of employment itself. However, once an offer has been made and accepted, the employer must provide fresh consideration in order to change the terms of the relationship.
Accordingly, if an existing employee is asked to sign a new employment agreement, they must be provided with fresh consideration (for example, a signing bonus, a raise, more vacation days, or some other greater benefit) in exchange for signing the new contract. Otherwise, the agreement will not be enforceable.
In addition, the terms of the contract cannot be unlawful (for example, in violation of the employment standards legislation) or unconscionable.
So what are some strategic considerations when preparing contracts in light of the pandemic?
Conditions of employment
For employers who require employees to be vaccinated against COVID-19, including a vaccination requirement as a condition of employment at the outset of the relationship will be helpful. Employers should also consider including such a requirement in situations where they are implementing new agreements for existing employees, as applicable.
Employers must be careful not to include blanket statements and would be wise to define terms and be as inclusive as possible. For example, employers can consider seeking proof of full vaccination against the COVID-19 virus or appropriate supporting documentation confirming that the individual has a medical or other valid reason protected by human rights legislation for having not received a COVID-19 vaccination.
Work location
The pandemic has completely shifted work locations for many workers across the globe. Several employers have gone fully remote, while others have adopted a hybrid approach indefinitely. However, as the restrictions and mandates eased, some employers faced difficulties as employees pushed back when asked to return to work in-person.
In most cases, it will be helpful to have specify expectations around remote work and retain discretion. For example, there might be a requirement that the employee work in a distraction-free environment while working remotely, that the remote work environment have a secure net connection and not take place in public, that the employee be available to meet in-person weekly or monthly, and that the employee seek prior written approval before moving out of a particular location (for example, Ontario).
Vacation time
A lot of employers and employees do not realize this, since it is somewhat counterintuitive, but employers have the right to assign vacation time under the Ontario Employment Standards Act, 2000 (ESA). The pandemic has taught many employers that the ability to assign vacation time can be very helpful in situations where an employee either refuses to take vacation or wants to delay it.
Many employers also do not realize their obligation to ensure that their employees take at least the minimum vacation time under the ESA. An employer can set clear expectations by including language in the employment agreement that they retain the right to assign vacation time to the employee, subject to the requirements of the ESA.
Temporary layoffs
Generally, when an employer places an employee on a temporary layoff without having the right to do so under contract or based on past practice, the employer should have written consent from the employee before proceeding. Otherwise, the employee may allege a constructive dismissal of their employment, exposing the employer to liability.
With the pandemic, many employers have increasingly come to recognize the importance of including temporary layoff clauses in their agreements. The pandemic has confirmed that including such clauses should be the norm, and not the exception. After all, if there is a temporary decline in business, employers can easily layoff employees temporarily without having to worry about constructive dismissal claims.
Bottom line
Employers are increasingly recognizing the value of having strategic contracts in place. In addition to reducing costs, well-drafted contracts — especially when combined with helpful policies — will strengthen an employer’s legal position. These are legal documents but should be drafted in a practical and strategic manner, based on the goals and needs of the business.
When done properly, contracts and policies can provide much needed certainty in the world of employment law which is often riddled with uncertainty. For instance, instead of having to debate an employee’s entitlement to severance, or the expectations the employer has relating to their conduct or behaviour within the workplace, the employer can set these terms out in writing and manage the relationship more effectively.
So ask yourself — instead of just playing the game, why not make the rules?
