Have you ever wondered what exactly should be included in an employment contract?
At goHeather, we have created a sample employment contract so you can see how one is made and what goes inside one.
Sample Employment Contract
Below is a link to a sample employment contract that includes some standard provisions and clauses used in Canada. goHeather made this sample employment to show you that you can easily make your own customized employment contract using our lawyer-made templates for your province in as little as five minutes for a fraction of the price of hiring your own lawyer.
Click to view the goHeather Canadian Sample Employment Contract (Link).
How to Write an Employment Contract (Sample)
Employment Contracts Generally
Employment contracts provide for mutual agreement on the terms and conditions of an employee's employment.
Employment contracts are written in favour of the employer to provide clarity in case the employee disagrees with the employer in the future on a term or condition of employment. However, this does not mean there cannot be favourable terms for the employee in an employment contract. Most importantly, the job of an employment contract is to to make sure the employer is protected in case there is disagreement or, worse, litigation, regarding potentially serious conflicts regarding the employment relationship. You would be surprised how often employees sue employers, so an employment contract is necessary.
Employment contracts come in all shapes and sizes. Employment contracts can be complex and lengthy, for example, for a high-paid executive, or short and straightforward, like for an entry-level position. In this way, an employment contract for an executive would require various unique terms, such as a change of control clause and various restrictive covenants. In contrast, an entry-level employee employment contract would require none of those terms.
Creating an Employment Contract
For starters, in all provinces in Canada, an employment contract must comply with provincial employment standards, at minimum. This is why you must carefully craft all your text to at least meet the floor of employment standards legislation. Otherwise, your employment contract could be held to be void.
Ensure your employment contract contains sections about core concepts like position, pay and termination, among others, with subsections containing narrow clauses within each section. For example, under the "Termination Section", include a section with the heading "Resignation".
Keep in mind that contracts aren't a templated copy-and-paste job. A contract for one kind of employee will look dissimilar than a different employee's. As mentioned above, some clauses are unnecessary for low-level employees, and some are critical for high-paid, senior employees. At the same time, some of the below-noted clauses may be non-sensical for some employees but reasonable for others. For example, a fast food worker wouldn't need a remote work clause, but an IT security person might need one.
Some of the Clauses in a goHeather Employment Contract
POSITION, TERM AND DUTIES
- Term – indefinite or fixed (start date, end date). This specifies the duration of employment, whether permanent or for a fixed term
- A clause dealing with the location of work (remote, hybrid, on-site)
- A clause dealing with changes to employment without triggering a breach of the agreement (i.e. constructive dismissal)
- A clause dealing with the expectation that employees commit their full attention and working time to employment (including issues concerning exclusivity – e.g., no side jobs). This ensures total commitment and focus from the employee towards their job during regular work hours
- A clause allowing a temporary layoff without triggering a breach of the agreement (i.e. constructive dismissal)
- A probationary clause. This allows the employer to terminate the employee with zero notice in the first three months if things don't work out
- A clause regarding the employee's salary
- A clause regarding when and how an employee shall be paid
- If the employer provides benefits, a simple clause that stipulates the terms and conditions of those benefits, including when they begin and when they terminate
- If the employee is eligible for a bonus, a lengthy clause stipulating the terms and conditions of that bonus, including whether the bonus is discretionary and what happens in the event of termination
- A clause providing for vacation days and how vacation pay is paid/accrued/rolled over (in line with provincial employment standards at minimum, like always). Be careful here - this is an area where even the most prominent employers make mistakes
- A clause dealing with termination without notice. This allows for immediate termination ("just cause") under certain conditions. Be careful here. A majority of current employment contracts (made before about 2021) failed to make this clause enforceable, which made all the terms and conditions regarding termination in those contracts void
- A clause dealing with termination with notice stipulating the amount of notice or pay in lieu the employee shall receive in the event they are let go. Be careful here; this is where even the most sophisticated employers, guided by the world's largest law firms, make mistakes, ruining their contracts
- A clause that clearly stipulates that all that is provided in the termination section of the employment contract is all the employee is entitled to upon termination only
- A clause dealing with resignation notice
- A clause dealing with the return of company property
RESTRICTIVE COVENANTS AND OTHER EMPLOYER PROTECTIONS
- A clause dealing with non-disparagement, preventing the employee from bad-mouthing the employer on any medium. This protects the company's reputation
- A clause dealing with non-solicitation of clients, employees and contractors
- A clause dealing with protecting the employer's confidentiality and trade secrets
- A clause dealing with the protection of the employer's intellectual property
- Not a non-competition clause! (they are predominantly illegal in Canada)
- A clause dealing with the IT security of the company (i.e. requirements that employers must use 2FA and never enter their username and password on anything but verified company software, for example)
- A clause dealing with reasonable use of social media (i.e. enforcing a rule that the employee will behave, e.g. not engage in racism, etc., on social media)
- Jurisdiction clause
- Choice of law clause. Avoid arbitration requirements here unless you have spoken with a lawyer who has advised you to do so and how to do so
- Electronic execution of the contract is permitted clause. This allows for digital signatures
- A clause stating that no modification to the contract can be executed unless both parties consent (i.e. no secret change of text upon signature). This prevents unilateral changes to the contract.
- A clause suggesting the employee seek legal advice before signing the contract (this strengthens the enforceability of parts of the contract)
- Entire agreement clause. This clause makes it so an employee can never later argue that they were promised something during negotiations or the interview stage that was not included in the actual text of the contract
- Fail-safe clause. This provides an attempt, not a guarantee, to back up other provisions of the contract if specific other clauses are found invalid
- Background check consent clause. Specific laws require consent and employee participation to conduct a background check, so this clause handles that if the employer wants to conduct a background check on an employee
This sample employment contract (Canada) provides a framework that can be customized to fit specific job titles. Still, it is only recommended to make your own employment contract if you have a grasp on local employment law legislation because crafting an employment contract that, even accidentally, contracts out of minimum standards can void your agreement (costing you common law damages or worse, in court). Either use goHeather, a locally made and modern employment contract template created by lawyers, or consult a lawyer to draft your employment contract.