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Should I Sign an Employment Contract?

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Maybe you just received a job offer, and your new employer presented you with an employment contract. Or maybe you got a job and were not offered a contract and now you’re wondering if the arrangement is legal or if your rights are protected. You’re wondering, “Should I sign an employment contract?

In this post, we’ll cover 9 common questions about employment contracts in Alberta:

  1. What is an employment contract?
  2. Why is an employment contract important?
  3. What type of employment contract do I have?
  4. What if I don’t have a written employment contract?
  5. What should be included in an employment contract?
  6. Is my employment contract valid?
  7. Can an employment contract disregard the minimum employment standards?
  8. Can my employer change my employment contract?
  9. What should I know before signing my employment contract?

The employment lawyers at Getz Collins and Associates can answer any other questions you may have about employment contracts in Alberta.

What Is An Employment Contract?

An employment contract is a binding agreement between the employer and the employee. It governs the employer-employee relationship and specifies the terms, conditions, and legal expectations of both parties, including:

  • compensation,
  • work hours, including entitlement to breaks and vacation time,
  • roles and responsibilities,
  • the length of employment (for fixed term arrangements),
  • work policies,
  • and more.

Why Is An Employment Contract Important?

In Alberta, the Employment Standards Code is the law that dictates minimum employment standards. Whether or not you have a signed employment agreement, your employer has a legal obligation to comply with these standards.

The Code is strictly for minimum standards, so many employment contracts provide better than those minimums. Especially in those cases, the contract is a vital document to secure the rights and entitlements of the employee.

However, some employers offer employment contracts that substantially limit your entitlements, and not all contracts are legally enforceable. Also, sometimes the written contract doesn’t match what may have been agreed upon in a verbal conversation at the time of hiring. That’s why it’s important to have your employment contract reviewed by an employment lawyer before you sign it.

What Type Of Employment Contract Do I Have?

There are three main types of written employment contracts: indefinite term, fixed term, and project-based. The type of contract you have will be determined by the nature of your working relationship. Each of these types of employment contract is subject to the requirements set in the Employment Standards Code.

The type of employment contract you have matters, especially in terms of termination clauses. The legal requirements and entitlements for termination differ for each type of employment contract.

Indefinite Term

Perhaps the most common type of employment contract is the indefinite term contract. This is for an employer-employee relationship that has no set end date. You are hired by an employer to do a job indefinitely.

Fixed Term

If you’re hired to do a job for a specific time period, ending on a predetermined date, your employment contract is a fixed term contract.

Project-Based

A project-based employment contract is a work agreement for a specific project rather than a period of time. The employee is hired to perform a specific job or provide a specific service until the project is complete.

What If I Don’t Have A Written Employment Contract?

Verbal employment agreements are not uncommon. Your employer may have hired you based on a conversation in which you agreed to your role, responsibilities, pay, and work hours. Even though these terms are not written, they form part of your employment contract.

As with a written employment contract, a verbal agreement is subject to the Employment Standards Code. So, no matter what you agreed to verbally, your employer must comply with the minimums set by Alberta’s employment law.

Even if your employment agreement was strictly verbal, it’s better to formalize it with a written contract so you have documentation that details the terms of your employment. The written contract ensures you and your employer are in agreement.

What Should Be Included In An Employment Contract?

The most common details included in an employment contract are:

  • Employee’s role and responsibilities
  • Compensation details, including statutory holiday pay and overtime
  • Work hours, including entitlement to breaks and vacation

Some employment contracts may include a variety of other terms and conditions, such as

  • Probationary period details
  • Confidentiality clause
  • Conflict of interest clause
  • Layoff policies
  • Termination clause

Is My Employment Contract Valid?

A contract isn’t automatically valid just because it’s signed. The law requires that an employment contract in Alberta meets certain conditions. Essentially:

  • Both the employer and employee must receive a benefit from the agreement. (The employer receives the work or service provided by the employee; the employer receives compensation for performing that work.)
  • An offer must have been made and accepted.
  • The contract and its terms cannot be illegal or unconscionable (unfair).
  • The contract must not be signed under duress. The employee must be given the opportunity to seek legal advice prior to signing the contract.
  • The language of the contract must be clear and understandable, not ambiguous.
  • The contract must at least meet or exceed the minimum requirements set by the Employment Standards Code.

Employment contracts are often unclear and confusing. It’s best to have your employment contract reviewed by an employment lawyer before signing it to ensure that it’s valid and enforceable.

Can An Employment Contract Disregard The Minimum Employment Standards?

No. If an Alberta employment contract disregards the minimum employment standards of the Employment Standards Code, it is illegal and unenforceable. The law supersedes the contract. For example, your employer cannot pay you less than minimum wage.

Can My Employer Change My Employment Contract?

An employment contract should accurately reflect the working relationship between you and your employer. If your role, salary, or any other terms or conditions of your employment have changed, the employment contract should be updated accordingly.

Your employer has a right to renegotiate your employment contract, but if they unilaterally and fundamentally change your employment agreement, you may be a victim of constructive dismissal. Examples of this type of change include lowering your position or wages or reducing your hours of work.

What Should I Know Before Signing My Employment Contract?

Your employment contract is a legally binding document that can protect your rights and entitlements as an employee. Don’t be afraid to negotiate the terms of your contract, if it’s appropriate. And don’t rush into the contract. You have the right to seek legal advice before you sign an employment contract.

If there is any disagreement between you and your employer in the future, a legal and enforceable employment contract serves as the “final say”. The contract determines the details of your employment relationship. So it’s important to understand all the terms of your employment contract before you sign it.

Your employment contract should include all the details of your employment agreement and it should be legal and enforceable. An employment lawyer can review your contract, ensure that it’s legal and enforceable, and help you understand exactly what it all means and how it can affect you now and in the future.

Before you sign your employment contract, have an employment lawyer at Getz Collins and Associates review it. We can ensure your workplace rights are protected. Contact us today.

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