Employment Contracts should be the backbone of any business or workplace. Every business should be using employment contracts and agreements to govern workplace relationships. An agreement that sets appropriate boundaries is a good way to ensure employment relationships – and departures – are as friendly and stress-free as possible.
The core elements of employment contracts have not changed much over the years. The Employment Standards Code (Code) sets minimum standards (which do change from time to time) around these core elements. In particular, the Code governs:
It is important to understand the Code when preparing an employment contract because any agreement that violates the minimum standards of the Code is void, or voidable, and may be set aside by a Court. Consequently employees and employers alike should be aware of the Code’s standards when the negotiate employment agreements.
However, the realities of modern workplaces require employers and employees stay alert to issues not covered by the Code. Employees are job-hopping more now than ever before and the increased use of technology is driving change in all industries. Fortunately, it is possible to anticipate how some of these changes will impact your business and take steps to protect your business interests.
All employment agreements should contain rules concerning termination of employment. A carefully drafted termination clause with clear rules is one of the best ways to help ease the strain caused by an employment break-up. Typically I recommend parties negotiate timelines for providing written notice of termination or departure and the method for calculating severance pay. If you do not set your own rules for termination and severance the doctrine of common law reasonable notice will apply and you may not like the result. Setting your own rules for termination, provided they don’t violate the Code, is an excellent way to avoid unforeseen costs and headaches.
Modernized employment agreements should also address matters concerning “Company Property” such as company-provided cell phones, computers, tablets, or employment-related data. Many businesses provide their employees devices for work purposes. Businesses get advantageous rates for data plans so providing employees a device they can use for work and some personal use is a popular and low-cost benefit. However, trouble can result if there are no clear guidelines for the use of such devices and the data they contain.
It is important to outline personal and professional expectations around devices and data. Employment agreements should make it clear if employees are expected to return their devices – and the data contained within them – when they depart. It is also important to clearly and unambiguously define Company Property so everyone understand it includes data such as software or server passwords, website logins, and other digital assets.
On a related note, workplace policy should also address topics like privacy, usage monitoring (if any), and what constitutes an acceptable use of a device or data. For example, you may want to make it clear that work-provided devices are for work purposes only and employees should not expect their use – especially Social Media use – to remain private. It is important to set clear boundaries so employees don’t mistakenly “move in” to their devices and workspaces and expect privacy when they shouldn’t. Rules should be clear enough that employees are not misled to believe they own their work-provided devices if that is not the intention.
It is also important for employers to have protocols or plans for retrieving devices and managing critical data assets when employees depart. Employers in particular should carefully consider how they will avoid business interruptions if employees “forget” or refuse to hand-over important passwords or log-in information when they depart. I recommend employers keep a master record of all important log-ins in a secure and discretely accessible place. That way they can be assured they have the minimum information required to request account changes or password resets if doing so becomes necessary.
Work is changing, and so to must our approach to employment agreements. The protections of the Code alone may not be enough to protect your business interests. Employers and employees alike should consult employment law experts regarding their agreements. If you have questions about employment agreements and how to craft them to fit the realities of your workplace our firm would be happy to help you find the answers that work for you.