If you are worried that your employee contracts may not protect your small business sufficiently, you aren’t alone. COVID-19 showed many weaknesses in employment agreements for businesses across Canada. But with many employees laid off and then recalled, there has never been a better time to overhaul your employee contracts.


The BC Government recently implemented changes to the BC Employment Standards Act, which further solidifies the need for a rock solid employee contract.


What can be learned from COVID-19

Did you know that if you laid off your employees during the pandemic, many of them may have had the legal right to claim constructive dismissal? Many small business owners are thanking their lucky stars that were able to lay off employees without being inundated with lawsuits.


Having the ability to pivot your business, protect your right to lay off your workforce, reduce salaries and modify job duties has become paramount to business survival. But these types of terms may not be found in your typical boilerplate employee contract.

New terms to consider in your employee contracts

When modifying your employee contracts, think about your business over the last several months. What would you need to do if the pandemic continues for another year? What would you need to do if your business was shut down again? 


Some areas of your employee contracts that you may want to look at closely:


  • Legal and enforceable termination provisions
  • Your right to layoff your employees
  • Your right to reduce salaries and modify job duties
  • Provisions for employees working from home
  • Intellectual property protections

Why is an employee contract important?

Even if you don’t have a written contract with your employees, a contract still exists. Not having a contract will leave you in a legal grey area, and disputes that arise may not be resolved in your favour. To protect yourself, your business and your employees, it is always a good idea to draft a legally binding employment contract with everyone you hire.


Modifying existing employee contracts

Keep in mind that modifying employee agreements for existing employees is not as straightforward as simply presenting them with a new contract to sign. Imposing new terms of employment in an improper manner where an employee would be dismissed for not signing is considered wrongful dismissal, where an employee may be entitled to monetary damages.


Generally, when a new contract is offered to an existing employee, you must provide fresh consideration and reasonable notice.


At Benchmark Law, we can help you draft or modify employee contracts, provide assistance in the case of a dispute, and assist with negotiations. Our small business lawyers can provide you with a free consultation when you contact us at 604-227-2892.