Among other things, an employment contract is an effective means to prevent the unexpected financial strain on your operating budget, that often accompanies a departing employee. But, when assessing the cost of an employee dismissal, many employers mistakenly rely on the obligations set out in the Employment Standards Act (the “ESA”) and employers relying on the ESA alone may be caught footing an unexpectedly larger bill than they anticipated.
Unless termination pay is expressly limited in an employment contract, the employer obligations set out in the ESA are treated by the courts as the ‘bare minimums. And where an employment contract doesn’t expressly limit the termination pay, or if there is no written contract at all, the employer is often liable for months of wages, even for short-term employees.
A written contract sets reliable limits for an employee’s termination pay, helping your business effectively plan for the future. Periodic review of existing employment contracts ensures they are tailored to your industry’s individual requirements and that they are current with BC law, further avoiding any surprises that negatively affect your bottom line.