You may be wondering if you just have someone working part time, or on a very casual basis, or in a low level role, whether you would even need a written employment contract or employment agreement. The reality is that every employee has an employment contract; if you don’t have a written one, then their contract is a verbal one that will not work in your favour.
Without a written contract, it is the specific terms you discussed, employment standards legislation, and previous judgments from employment law cases, that govern the foundation of your working relationship with your employee. Many terms will be “implied” into the contract by law, and those are designed to protect the employee, not you.
Legally you cannot offer an employee anything less than the minimum employment standards set out in legislation, such as the Employment Standards Act, 2000 in Ontario or the Canada Labour Code for federally regulated employers. However, an employee’s default entitlements on dismissal are typically much more than their minimum entitlements. With a well drafted employment agreement, you can specify what the employee’s entitlements will be ahead of time and reduce your liability. Employment contracts must be very carefully written if you want to minimize what you owe someone upon termination, otherwise they could be entitled to a much larger amount as decided by the Court. Learn more about that here.
