'Kitchen sink' approach to contracts often fails - Metro US

‘Kitchen sink’ approach to contracts often fails

Employers often take a kitchen sink approach to drafting employment contracts. They bargain for excessive protection, no matter how junior or administrative the employee. However, in seeking such protection, they sometimes get none at all. Here are some common errors.

Probationary periods
Unless a contract provides for it, probation does not exist. Further, it is not enough to refer to an employee as “probationary.” The contract must state that the employee can be fired for any reason, without pay or notice, during the probationary period. Otherwise, don’t refer to probation at all.

Legal advice
In one recent Alberta case, the court refused to uphold a contract because there was an implication that, had the employee not signed it, she would have lost her job. Employees should be given time to seek legal advice and an opportunity to negotiate terms.

Prior tenure
Upon a merger or acquisition, prior tenure is not simply erased – it continues, unless a contract states otherwise. In one of my cases, the employer argues it is not responsible for the severance owed to a long-term employee because much of his tenure was with a predecessor. However, because the contract was silent, it is wrong.

Severance provisions
If a contract clearly permits termination upon payment of only statutory requirements, there is no right to severance, no matter how long or meritorious the employee’s tenure. There is only a right to get what the contract says.

Reference to policy manual
For a policy manual to form a “term” of employment, it is not enough to refer to the existence of the company’s manual in the contract. The manual must be attached to the contract, and the contract must confirm that the employee has read the manual and accepts those terms. For example, in another of my cases, the employer states that a clause in its policy manual formed an important term of my client’s job. If this were true, they why did they not put that into their contract?

– Daniel A. Lublin is an employment lawyer with the law firm Whitten & Lublin LLP. Reach him at dan@toronto-employmentlawyer.com

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