The uncertainty of the workplace in the 90's has resulted in the increased use of written employment contracts.

By the late 1970s, the law was requiring that employers give employees longer notice of the termination of their employment. Prior to this time, short notice of a pending termination was the normal practice. Notice periods were awarded in wrongful dismissal lawsuits for periods of up to 24 months and this resulted in employers seeking to limit their exposure by written contracts which contained termination provisions.

Nowadays employers are also concerned about confidentiality, non-competition and non-solicitation of their clients by former employees. At the same time employers seek to limit their legal exposure and protect their interests, a new or existing employee may find comfort in confirmation or reaffirmation of the employers' obligations.

Reducing a contract to writing is important in many regards:

• It provides both parties a degree of comfort and certainty in having major aspects of the employment relationship defined
• In the event of a misunderstanding or when a dispute arises, it reminds the parties of their obligations
• In the event of a lawsuit, a written contract provides "less" controversial evidence which can be reviewed to interpret the parties' agreement

For these reasons, personnel departments should review the employer's workforce and determine which employees should have a written contract.

Historically, agreements with sales persons were outlined in written contracts, however today, the fastest growing type of written employment contract is that involving executives. Executives often move to follow better opportunities, as they consider money and prestige as well as the attractiveness of their assignment. At the same time it is important for an employer to be in a position to terminate an executive if necessary, and a written agreement can limit their exposure to damages.

Like any other agreement, employment contracts are arrived at through negotiations. From an employer's perspective, a contract is best negotiated before the employee commences work.

During the negotiations between the parties the employer must ensure there is consistency between any job advertisements, internal policies and what is said during an interview up to the final version of the written contract. In this respect, employees and third parties negotiating with a potential employee should be reading from the same script.

Contracts that are one sided or illegal will not be enforced by the Courts so it is important to review any standard written form of contract with a lawyer to ensure that they meet basic legal requirements. The provisions of the written contract should be clear and the employee should have an opportunity, if they desire, to review the document with their own lawyer. It is far less costly to have a lawyer review a contract at the outset of an employment relationship than to retain a lawyer in the aftermath of a breakdown in legal relations.

A simple contract can be drafted by the parties themselves, the most important guideline being that the language of the document should be clear in regards to the parties' intentions. If the agreement is complicated or there is a concern that a written contract may not be complete, parties should be given an opportunity to review the document with a lawyer before it is signed.

For many employment relationships, a letter setting out the key matters may suffice. If the parties are considering something more comprehensive, it is important to determine the key provisions to be incorporated into a written contract. Some conditions of employment require necessary intention such as:

• Performance Standards
• Length of Employment
• Remuneration
• Job Duties
• Non-Competition
• Non-Solicitation
• Confidentiality Causes
• Termination Provisions

The duties of the employee should be set out in general performance provisions in the contract. The employer should always reserve the right to change a job description and build some flexibility into the contract in this regard, as this could avoid a potential claim for constructive dismissal in instances where an employee is subjected to changing work hours, work location etc. Performance standards can be incorporated to ensure there is no misunderstanding regarding the employer's expectations of the employee. Any provision dealing with performance should also be flexible in the event the job description of an employee changes.

One of the provisions of a written contract that requires careful drafting is a termination clause. In the absence of such a provision, an employer who terminates an employee must provide them with "reasonable notice". Reasonable notice is the length of time it would take for an employee to find a similar employment situation. Where employees are older, earn a high salary, have managerial responsibilities and have worked for a considerable length of time with the employer, the law imposes lengthy notice periods.

In the event litigation occurs between an employer and employee, Courts scrutinize termination provisions carefully to ensure that they clearly state what the parties have agreed to. These clauses should be specifically pointed out to the employee.

If a termination clause in a written contract falls below the minimal standards set out in the Employment Standards Act, such a term will not be enforced. When a termination clause fails then the employer is left with the consequences of the common law and terms it will imply into a contract.

Periodic review of written employment contracts, especially with respect to termination provisions, is a practice which should be followed by employers.

Employers seek to limit their obligations to an employee by having a term contract versus hiring an employee on an indefinite basis. However, if there is a fixed term and the employee is kept on even one day beyond that term, then their status reverts to that of a permanent employee. When a term contract employee is discharged before the written contract expires, an employee can sue for all of their losses prior to the end of the term. Consideration must be given to these consequences of a term contract.

Provisions in a written employment contract may restrict an employee from soliciting customers he or she dealt with on behalf of their employer. These provisions are enforceable in legal disputes, especially in instances where the employee acknowledges that they understood and agreed to the obligations imposed by such provisions. Client and customer lists should be appended to contracts containing this type of provision.

Courts are reluctant to restrict the ability of a person to earn a livelihood. Provisions preventing an employee from competing with a former employer effectively prevent a person from earning a living.

In the event of a legal dispute where such a provision is at issue, Courts will review the employer and employee relationship to determine whether an employer has a legitimate interest to protect. The Court will then review the provision to see if it is reasonable with respect to the time and area where the former employee is prohibited from competing. The restriction cannot be for too long, it cannot be too broad and the geographical area of competition cannot be too large. It is unlikely that a non-competition provision will be enforced for much longer than 18 months. The more essential the employee is to the employer's enterprise, the more protection is likely to be afforded to the employer as the employee is likely to pose more of a threat. Again, client and customer lists should be appended to contracts containing this type of provision.

Another popular type of provision is a confidentiality provision, where employees have a duty to maintain their employer's secrets. In competitive industries such provisions are especially important to incorporate into written employment contracts.

Disputes arise where employers and employees having different expectations. If the parties' rights and obligations are clearly specified in writing, lawsuits can be avoided. Employers are less likely to make promises which they are not prepared to fulfil if they are set out in writing, and on the other hand employees have a clear picture of their employer's expectations.

In view of the recent events in the workforce, employees are more likely to seek the advice of a lawyer and will want to review a written contract with them. The introduction of a contract in an existing employment relationship, which has never had a written contract, also causes "anxious" employees to consult with a lawyer.

Certain circumstances will cause a Court not to uphold a written contract; 1) the employee does not read and understand the contract, 2) the employee is not provided with an opportunity to seek independent legal advice, 3) the employee signs the contract under duress, 4) the contract falls below the minimum standards of the Employment Standards Act, and the employment contract is manifestly unfair.

On a review of the pros and cons, it would appear that it would always be to the employer's advantage to have a written contract in place.