Are your employment contracts legally compliant?

It’s the beginning of a new year making it a great opportunity to ensure all company documents are compliant and up to date. “A well-written and comprehensive employment contract is an essential component to protecting both the interests of your business as well as your staff. Employment contracts help to provide clarity on everyone’s rights and responsibilities” says Ramsey Aburaneh, Head of Digital Growth, at BrightHR.

Ramsey goes over valuable information every employer needs to know about employment contracts.

*Are written employment contracts better than oral contracts? *

Although the terms of employment can be provided orally, it's best to outline important information in a written contract. Written contracts are strongly recommended as they help:

  1. Outline responsibilities - employment contracts provide important job details such as duties, benefits, salary, etc. Having this in writing helps to clearly outline the role of the employee. It also helps to set expectations, making them aware of all their responsibilities in the workplace.
  2. Resolve disagreements - a written contract that clearly defines the terms of employment and rules of the workplace can serve as a reference guide in case of any disagreements. Employment contracts often include dispute resolution procedures that help avoid long legal battles, along with the time and high costs associated with them.
  3. Avoid litigation - a well-written contract significantly reduces the risk of legal claims for the employer and protects the rights of the employee by ensuring they receive the minimum entitlements stated in the applicable employment standards legislation.

*What should employers include in an employment contract? *

Aside from the minimum entitlements required by your applicable employment standards legislation, any additional clauses and policies that can be included will depend on the industry and type of employment being offered.

Some basic terms of employment you should consider including are: • Hours of work • Job responsibilities • Conditions of offer (background check) • Temporary layoff clause • Termination clause and policy

*What should employers keep in mind when drafting employment contracts? *

It’s important for employers, especially those operating a nation-wide business, to remember that employment law varies across jurisdictions. It is the employer’s responsibility to stay up to date on any legislative or common law updates that may alter or invalidate their contracts.

Additionally, for any job contracts to be considered valid, they must follow the minimum terms and entitlements set by the applicable employment standards legislation. Employers are free to offer more benefits to employers, but they cannot offer less than the minimum entitlements.

“The process of writing an employment contract can be very lengthy, especially when employers are busy gathering the required information needed for a contract. But by utilizing smart HR software, employers can get the documentation and templates they need at the click of a button. BrightHR’s BrightBase gives employers access to a large library of reliable and expert HR and health & safety templates and guides. Employers can download an employment contract template and easily fill it in. Additionally, the templates and guides are all up to date with legislative changes which ensures employers are in line with the law," says Ramsey.

Below are some additional best practices to follow while creating employment contracts:

  1. Always use clear, detailed language
  2. Attach relevant documents to the employment contract
  3. Have the contract signed prior to the first day of work
  4. Employers should update their employment contracts and policies in compliance with changing legislation and legal requirements.
  5. Provide the employee with enough time to review the contract and seek independent legal advice if they so choose.


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