Employment Law I
A few weeks before the pandemic, I had the pleasure of attending a seminar put on by an employment law firm based out of London, Ontario. In many cases, we are not usually engaged with a client until there is a problem with employees, so I thought I would provide some of the insight that I gained during the seminar. I am working on a few blog articles, but I thought I would give some points to help business owners who might be having to hire new employees or having to change an employee's terms of their job in some way.
Employee Contracts
When you hire an employee, you must have some type of contract that covers the job and responsibilities and lays out the terms of their employment. This will differ depending on the kind of job or position. It is best that all of this is outlined in the contract, and when you offer the person the position, you let them know they will be receiving an offer with the contract instead of discussing the information with them. The reason for this has more to do if you want to change anything down the road, or at the time of termination. If you said anything in the conversation that differs from the contract, that could be brought up at a later time.
When you look to hire an employee, there are three parts to it:
- the offer
- acceptance
- consideration
The offer itself outlines the terms and conditions. The acceptance is that of the potential employee accepting the terms and conditions, and consideration is something of value for both parties in entering into the contract.
The offer/contract should be given to the employee without any verbal discussion. They should be given the appropriate time to review the contract. Depending on the position, the employee may choose to have their lawyer review it before accepting it. You want them to do this because if you terminate the employee, and it is determined they were not given the appropriate time or felt pressured to sign the contract, it could increase what you are paying. You then want to make sure that the contract is signed and given back to you before the employee starts. We had a client that provided a contract to an employee when they were hired, but when they decided to terminate the employee, they found the employee had not signed the contract at all. Make sure that the contract is in their personnel file.
Changing an Employee's Job
There are times that you might want to change an employee's position. This could be due to performance issues in an area of their job or could be due to the position having to change due to having to limit staff and needing to rearrange duties. Unfortunately, this cannot happen unilaterally, as this could be considered constructive dismissal. Many times employers think they are doing an employee a favour by keeping them on versus possibly using their job, but the employee has to agree to the changes. Any time you unilaterally look to materially change an employee's job or change terms outlined when they started, they need to be informed.
When you are looking to make these changes, you need to look at providing some extra consideration. Much of this will depend on the type of change and how material it is. In some cases, you may be asking them to take on additional responsibilities for taking over someone else's position. In this case, the consideration might be a bonus or a slight raise and elevation in their title. Maybe you are looking for someone you hired for the day shift to work evenings which might be an inconvenience for them; you might look to provide them additional vacation time.
Summary
So many times we hear, we don't need an employment contract, we are just a small business. As an employer, you have to abide by the employment laws in your jurisdiction. Whether you have a contract or not that relationship and the laws associated with it are binding. It is important when an employee starts that they understand what the position is, understand the expectations, and know what terms and conditions exist regarding employment with your business. The employment contract protects both you as the employer and the employee.
You only need one lawsuit to put your business under. It is true that most small business employees don't always know their rights like their counterparts in big business and in most cases do not go out and hire a lawyer when they are let go or understand constructive dismissal. Do you want to gamble with your business? In many cases, the employer is found at fault and not only has to pay the employee what the court deems along with their own lawyer but in addition the legal fees of the employee.
