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The Problems with Employment Contracts in Alberta

Updated: Aug 21, 2020

At Floden Ward LLP we spend a lot of our time reviewing, negotiating and drafting employment contracts. Surprisingly, despite the importance these agreements have in setting out the rights between employers and employees, they tend to have problems. Some of the issues we see (in no particular order):

1. Not dealing with severance at all. Sometimes employment contracts are prepared simply to reflect the basic terms of the employment relationship: pay, position, start date, holidays and things like that, and the parties do not address severance. In our view they should. In the absence of an enforceable contract to the contrary, in most cases the common law will end up setting severance amounts.

2. Not dealing with prior employment in a transactional situation. The courts in Alberta will recognize prior service in a merger and acquisition unless it is addressed in the employment contract.

3. Not drafting carefully. Mistakes in the details or numbers of compensation, bonuses, dates, or parties or duties contained in a contract can be costly.

4. Completing the contract after the employment relationship has begun. The law of contract has a concept called consideration, meaning something of value must flow between the parties for it to be enforceable. The law says past consideration is not good consideration, so delays in preparing a contract can be fatal.

5. Thinking that all of your contractual terms survive wrongful termination: in many cases this is not the case. An employer cannot wrongly terminate an employee and expect to enforce non-solicitation or non-compete provisions against them.

How to deal with employment contracts

The best time to deal with employment contracts is at the start of the employment relationship. The next best time is when you become aware you have an issue.

If you are an employee who needs to have an employment agreement reviewed, or if you have been terminated and want your contract reviewed please contact us. If you are an employer who is concerned about your employment contracts, we would be pleased to assist.

To get in touch with out team of attorneys, please contact us today.

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