Failing to properly adapt templates or precedents to your specific needs will lead to increased liabilities and labour costs
By Stuart Rudner
As technology evolves, there are frequent discussions regarding the commoditization of various services, including those traditionally provided by lawyers and HR professionals.
Employment contracts and policies are a prime example — there is no shortage of online resources that will provide you with precedents or templates. Carswell has its own service, Consult Carswell, that offers templates, and I provided the legal review for another, somewhat similar product.
In each case, they allow employers to avoid sitting down to draft a contract or policy and “starting with a blank screen.” They are intended to provide samples or basic outlines to be adapted to the specific situation, but unfortunately that does not always happen in practice.
The services that offer templates typically recommend that users adapt the template to their specific needs, and some of them even go so far as to recommend the user have the documents legally reviewed. However, in my experience, most organizations don’t heed that advice. Unfortunately, having a contract or policy that has been “borrowed” and implemented without any thought as to whether it applies to the circumstances is not much, if any, better than not having one at all. In many cases, it gives employers a false sense of security.
In addition to the types of services referenced above, it is quite easy to go online and find examples of the type of document that you might be seeking through a simple search. Alternatively, you can get them the old-fashioned way by “borrowing” one from a friend or colleague. I generally discourage this, as the documents you find will probably not be designed for your specific needs. At best, these should be used as guidelines
In many cases, organizations rely upon precedents that are from different industries and even different countries. Needless to say, using a contract of employment in Canada that refers to “employment at will” will not be particularly helpful. Similarly, having a policy manual that requires employees to be “at their desk” by 9 a.m. every morning is not particularly helpful to a company hiring labourers to provide landscaping services. In some cases, companies have attempted to rely upon policies they thought were in place, only to find they were not addressed in the precedent employee handbook they simply copied and distributed.
I have written many times in the past about the importance of using employment contracts and policies. Simply put, they give employers the opportunity to establish the rules of the relationship, minimize obligations and potential liabilities, and also maximize the organization's rights and efficiencies when it comes to human resources. The HR laws in Canada are, by default, quite employee friendly. However, there are many opportunities to make the relationship more balanced. Failing to use contracts and policies is a missed opportunity.
That being said, it's critical that employers take the time to think about the policies and issues they want to have addressed and ensure their core HR documents address them properly. While there is nothing wrong with using a template in order to avoid starting from scratch, organizations should think about the issues they want to address and make sure they are done in a manner that maximizes results and also ensures compliance with applicable laws.
To that end, and in addition to working with an HR professional, it is critical an employment lawyer be brought in to provide a legal review. You can’t just assume the document comes from a credible source and is therefore “good enough.”
I am very much aware of the fact organizations are mindful of costs and wary of incurring large legal bills. However, when I am confronted with the comment that “a contract or policy manual is not in the budget right now,” I often ask whether a wrongful dismissal or human rights claim is.
The reality is failure to adopt a strategic approach to HR makes such claims, and others like them, more likely. And if a claim is brought, the organization will not have the option of delaying their response until their finances are in better shape.
For that reason, I encourage organizations not to consider employment contracts and policies as a “luxury” that can wait until the right time. The longer you wait, the more risk you have and the more likely you will be missing out on efficiencies and savings that will positively impact your bottom line.
A simple example: Many organizations have loose policies regarding the use of vacation time, and end up paying far more than they should have to as a result of unused vacations. Those costs could be avoided through the use of a well-drafted and enforced policy.
It is always advisable to be cost-conscious. However, as a warning, I often relate the story of a family I know that went to a local store and bought one of the readily-available “will in a box” products.
They then prepared wills for all members of the family, which owned and operated a business worth several hundred million dollars. When one member of the family died, the others had to pay millions of dollars in taxes, almost all of which could have been avoided with proper estate planning.
While that advice might have cost a few thousand dollars, it would have provided a huge savings in the long run. Core HR documents such as contracts and policies are similar.
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 [email protected]. You can also follow him on Twitter @CanadianHRLaw and join his Canadian Employment Law Group on LinkedIn.