Important Facts About Employment Contracts – Part 2

Following up on last week’s blog about how to enforce employment contracts, this week we will look at some things that can happen at the end of an employment contract.

Watch out for expiry dates! If your employee is on a fixed-term contract (such as 6 months), make sure that the start and end dates are clearly stated in the contract and that you do not miss the expiry date.

If the employee continues to work past the expiry date and you have not arranged a new written agreement, they become permanently hired on a “common law” basis, meaning there will be extra payouts on termination of employment, and the contract you have with them is not enforceable.

No termination payment is needed on fixed-term contracts.  So long as you do not miss the expiry date as mentioned above, an employee working on a contract which clearly states the end date of the contract is not entitled to any notice of termination unless otherwise stated in the contract. For example, you hire someone to fill a maternity leave and state in the contract they work from April 1 to December 31.  The worker will not be entitled to any termination pay unless the contract ends before December 31 (in that case the employer would have to pay out the remaining time on the contract unless it is a “just cause” dismissal).

Employment legislation is complex and confusing. Call us today for help!