Ways to Protect Yourself

1
Ways to Protect Yourself

• Written Employment Contracts Termination of the
  Employment Relationship

Norm Grosman Grosman, Grosman, Gale LLP Suite
400 111 Richmond Street West Toronto, ON M5H
2G4 Tel [phone] Email ngrosman_at_grosman.com
Web www.grosman.com
2
Introduction

• The Supreme Court of Canadas take on the
  employment relationship
• Written contracts the art of managing
  expectations
• A proactive approach saving
• Time
• Money
• Risk
• Aggravation
• Leverage when does it exist and who has it?

3
Written Contracts of Employment

• Unwritten contracts
• Format
• Standard form
• Letter agreement
• Legal agreement
• The basics
• Offer and acceptance
• Consideration
• Certainty of terms

4
Entering Into an Enforceable Contract

• New employees
• Key steps
• Present with offer of employment
• Routine explanation
• Record explanation
• Independent advice
• Never minimize importance
• Ensure document is signed, dated, witnessed and
  receipt of copy acknowledged
• Existing employees

5
Entering Into an Enforceable Contract

• Advantages
• Certainty
• Limit liability
• Clarify expectations
• Building in flexibility
• Fix duration of relationship
• Limitation of promises
• Post termination obligations
• Psychological vs. legal

• Disadvantages
• Certainty that locked in feeling
• Ambiguity of terms
• May cause difficulties in hiring
• May become stale over time
• Cost of administration
• Enforceability
• Minimum standards
• Consideration

6
Employment Contract Checklist

• Position
• Title
• Responsibilities
• Changes
• Location
• Initial/transfers
• Changes
• Term
• Probation
• Avoid contradiction with termination provisions

• Compensation
• Base salary
• Review processes
• Fringe benefits
• Automobile
• Bonus plan
• Vacation
• Expenses
• Employee covenants
• Whole time and effort
• Diligent and faithful services
• Rules and regulations
• Outside activities

7
Employment Contract Checklist

• Termination provisions
• With cause
• Without cause
• Resignation
• Return of property
• Restrictive covenants
• Competition
• Solicitation
• Renewal of contract
• General provisions
• Entire agreement
• Amendments
• Governing law
• Copy of agreement received

8
Ten Key Contract Considerations

• A written contract or no written contractThat is
  the question
• Dont panic. Your employment is based in the
  legal concept of contract. Is may be oral,
  written or partly both.
• The one-way street
• Many written employment contracts presented by
  employers look after their interests but whos
  looking after yours?
• Looking for leverage
• If you have some leverage, recognize it,
  understand it, utilize it negotiate! Dont
  settle for standard form.

9
Ten Key Contract Considerations

• The letter U
• Undue influence, unequal bargaining power, and
  unconscionability can all undermine the
  enforceability of a written employment contract
• Promises, promises, promises
• Many employment contracts have a clause which
  confirms that the written terms are the entire
  agreement between the parties. If the promise to
  promote, increase salary, grant stock options,
  etc. isnt in writing, forget about it.
• The old switch-a-roo
• You employer comes to you well after youve
  started work and presents you with a new, written
  employment contract. Whats going on and whats
  in it for you?

10
Ten Key Contract Considerations

• Nailing down the dollars
• You will want to ensure all aspects of
  compensation are clearly spelled out including
  base salary, salary increases, fringe benefits,
  bonus plans, stock options, profit sharing,
  commissions, car allowance and expenses.
• If it goes south
• Relationships, particularly employment ones, are
  rarely forever. The employment contract allows
  you to plan for an orderly and fair break up.
  Termination provisions should never be ignored or
  minimized

11
Ten Key Contract Considerations

• The next chapter
• Will you have the freedom to move to future
  employment of your choice or will restrictive
  covenants present a road block. Beware of
  non-competition and non-solicitation clauses.
• How will I know?
• When a prospective or current employer presents
  you with an employment contract get experienced,
  competent advice. Make informed and practical
  business decisions.

12
End of Employment Relationship

• Resignation
• Abandonment
• Frustration
• Termination
• For cause
• Business cause
• Legal cause
• Without cause
• Constructive
• Suspension

13
Employment Standards Act

• Notice of termination
• 1-8 weeks
• Varies with service (minimum 3 months)
• No change in terms
• Severance pay
• Must have 5 years service
• Annual payroll 2.5 million
• Up to 26 weeks wages for regular non-overtime
  work week

14
Reasonable Notice Criteria

• Length of service
• Age
• Break in service
• Lack of employment opportunities
• The specialist
• Inducement
• Character of employment
• Education
• Heath
• Behaviour of employer (bad faith)
• References
• Mitigation

15
Negotiating

• Putting together on offer
• Cause or no cause
• Contractual provisions
• The Termination Trilogy
• Reasonable notice
• Elements of compensation package
• Structure of offer
• Outplacement
• Reference
• Restrictive covenants
• Release
• Employer philosophy

16
QA?

• Thank you

Norm Grosman Grosman, Grosman, Gale LLP Suite
400 111 Richmond Street West Toronto, ON M5H
2G4 Tel [phone] Email ngrosman_at_grosman.com
Web www.grosman.com