Signing Employment Contracts

The topics in the Dial-A-Law series provide general information on legal issues within the Province of Alberta. The purpose of this topic is to inform you of your legal rights and responsibilities. This is not legal advice. If you require legal advice, you should contact a lawyer.

This topic discusses important considerations before signing employment contracts.

Employment Contracts

Employment contracts are written agreements that state the legal expectations of both the employer and employee. Written agreements are important, and can confirm any verbal agreements of employment.

The length of an employment may be for a fixed term or indefinite duration. Fixed term contracts are used when there is a definite start and end date of employment. Fixed term contracts can include; maternity leave positions, employment for a specific task (election work), or employment based on a grant for a pre-determined duration.

Consideration  

A contract must be supported by consideration to be enforceable which means that both the employer and the employee must give and receive a benefit. In the case of an employment contract, the employer’s consideration is paying the employee to complete a task or provide a service. The employee’s consideration is performing the work agreed upon. Such actions make an employment contract enforceable, meaning that the contract is enforceable in court if there was any disagreement.

Written Contracts

Offers of employment should be in writing to ensure both parties agree on the terms and conditions of employment. The contract should be finalized and signed prior to starting work.

If a verbal offer of employment is made, it should be followed by a written contract as soon as possible. Ensure the contract accurately reflects your verbal agreement with your employer. If there are any terms verbally agreed upon that are relevant to your employment and missing from the contract (length of employment, salary or notice for termination), ask for the contract to be revised before signing.

If you are still uncertain of your rights and responsibilities, consult a lawyer before signing the employment contact. Employers should also get legal advice in drafting employment contracts to ensure compliance with provincial and federal laws.

There must be new consideration (such as a pay raise or promotion) if you are offered an employment contract when you are already working for that employer.

Information Required in an Employment Contract

The following information should be in every employment contract;

  • (1) The employee’s job title;
  • (2) The employee’s role;
  • (3) The geographic location of the company or office;
  • (4) The scope or nature of work;
  • (5) The name of the direct supervisor;
  • (6) The form of remuneration and how much (i.e., annual salary, hourly wage); and
  • (7) Any eligibility and options for health and dental benefits.

The employer should indicate in the contract whether the scope or location of your work may be changed by the employer.

Conditional Employment Contracts

Conditional employment contracts are dependent on certain requirements. These requirements can include; reference checks, background checks, verification of credentials, passing an exam or proof of eligibility to work in Canada. A person may be ineligible to work for that employer if they fail to meet the pre-requisites written in the contract.

Uncertain Contract Terms

Vague terms and uncertain conditions of employment contracts can result in disagreements over length of employment, pay or termination. This may force the employer and employee to resolve the disagreement in court.

In order to avoid disagreements, ensure that you understand all terms of the contract before signing. If you are unsure about any term, ask for clarification from the employer prior to signing the employment contract. Further, ensure you understand all company policies referred to in the employment contract before signing.

 

Probationary Period

Employment contracts often set a probationary period for new employees. This period is one in which a person’s employment can be ended without notice. The terms and conditions of any probationary period should be written in the contract and brought to your attention. Note, the Employment Standards Code of Alberta states that an employee is eligible for notice of termination or pay in lieu after 90 days of employment.

 

Confidentiality

Certain employment contracts may contain a confidentiality clause or an employee may be asked to sign an entirely separate confidentiality agreement. Be sure you understand your requirements in keeping materials, records, documents and information confidential. Ask your employer or Human Resources Department at any time during your employment if you have questions or concerns regarding confidentiality of your information or confidentiality of materials belonging to the organization.

An employer may require employees to return confidential documents at the end of their employment with the organization. Employment contracts and workplace policies often state that information must be keep confidential, even after am employee no longer works for the organisation. The law also implies this obligation, regardless of workplace policies. Check your workplace policies and consult a lawyer before using any of the organization’s materials outside the scope of your work or after your employment had ended.

Conflicts of Interest

An employment contract may include a clause that prohibits certain business relationships that could result in a conflict of interest. A conflict of interest is a situation in which a person may not perform their employment duties adequately, as a result of a relationship with another person or organization. Relationships that may create a conflict of interest can include; certain investment, business relationships or employment relationships. The Human Resources Department of an organization usually provides written documents describing what activities or relationships are considered a conflict of interest. For example, a person may be prohibited from working for a direct competitor while working for their organization.

 

Updating Employment Contracts

Employment contracts should reflect the actual relationship between employer and employee. If an employee’s role or position has changed their contract should be updated, and proper consideration should be received, to ensure the contract reflects your current duties and responsibilities. Employment contracts may state that a change of position, salary or title does not affect the terms and conditions of the agreement.

 

Employment Standards in Canada

The Canada Labour Code governs the workplace requirements of federally regulated employees. Federal employees include employees of banks, most federal Crown corporations, water and air transportation, broadcasting, cable systems, grain elevators, many First Nation Activities and fisheries. The employment standards for individuals who work outside of these industries are governed by the provincial or territorial employment laws.

 

Employment Standards in Alberta

The Employment Standards Code of Alberta sets out minimum conditions of employment to protect employees. Certain contracts are illegal and unenforceable in Alberta if the contract does not comply with the Code’s minimum standards. If a contract allows an employee to perform illegal work, work in dangerous conditions, work without a permit or work without rest breaks, the contract could be illegal.

Certain employment contracts have specific standards adapted to reflect their job requirements, including firefighters, ambulance attendants, caregivers, construction workers and farmers.

Leaves

The Employment Standards Code of Alberta provides for a number of job-protected leaves. The list of job-protected leaves was expanded in 2018.

Youth Employment

Employers cannot hire youth under the age of 13, except with a specific permit such as for arts and theatre. Youth under the age of 16 cannot be hired for hazardous jobs. Youth aged 16 or 17 may be hired for hazardous work only if the employer has obtained a permit and has provided supervision and training. Youth are encouraged to consult a parent or guardian before signing an employment contact.

Employment Concerns

Any person can file an employment standards complaint or an anonymous tip if they have concerns about their workplace standards.

Written agreements prior to starting work can avoid uncertainty and disagreement. If you have questions about your workplace standards or safety, contact Employment Standards at 1-780-427-3731 (Edmonton) or toll-free at 1-877-427-3731.

Dial-A-Law is a Calgary Legal Guidance public service project funded in part by the Alberta Law Foundation.