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Employment contracts in Ontario

An employment contract sets the terms of the employment relationship between you and your staff. Employees see contracts as a way to safeguard their rights. For an employer like yourself, they are tools to set expectations and protect your business.

As an employer, you have a legal duty to meet the minimum standards set out in Ontario's Employment Standards Act (ESA). This includes the wage for the role, leaves of absence, vacation pay, work hours, notice periods for termination, and severance pay.

While employers can offer more benefits to their employees, they cannot provide less than the minimum entitlements outlined in their provincial employment standards legislation.

Your employment contract and company policies must also comply with the provincial occupational health and safety law and human rights legislation.

Properly drafting an employment contract is critical for your business. But writing them up isn’t easy. And getting any part of it wrong leaves you open to a long list of claims from employees.

There are three main types of employment contracts in Canada:

Indefinite-term contracts
Fixed-term contracts
Independent contractor agreements

When is an employment contract legally valid?

An employment contract is legally valid whether it is in writing, stated orally, or implied. Best practices advise for written contracts as they are easier to prove than a verbal agreement in cases of doubt or if contested.

In terms of documentation, employers are legally required to record and retain key information for every employee. This includes:

The employee’s name, address, and starting date
The hours worked by each employee
The employee’s date of birth (if under 18)
The employee’s vacation records including vacation pay

Keeping all this on hand ensures you are staying compliant. It also helps you protect your business in case of any termination issues.

Why is documentation important?

Simply put, documentation protects your business. For Ontario employers, employment contracts are the most valuable tool to secure your business.

Do you know what to put in your employment contracts?

If you need employment contracts tailored to your specific business needs or would like to update or review your job contracts, you’re in the right place. Our experts are here to keep your business protected and running efficiently. We want you to feel confident when it comes to contracts and your business.

If you have any questions about work contracts or other employment issues, our experts are here to help.

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