Why Small Business Owners Need Up-To-Date Employment Agreements-Especially in Construction
For many small business owners, especially in the construction industry, employment agreements often fall to the bottom of the priority list. In some cases, they were never put in place at all. While this may seem harmless, it can expose your business to significant and unexpected legal liability.
The Risk of Operating Without a Written Agreement
A common misconception is that if an employee falls within an exemption under employment standards legislation (such as construction workers), the employer’s obligations are minimal. However, this is not the full picture.
Even where employees may be exempt from certain provisions under the Employment Standards Act, 2000 (“ESA”), they may still be entitled to reasonable notice of termination under common law. This can result in damages far exceeding minimum statutory entitlements.
Without a properly drafted employment agreement that clearly limits an employee’s entitlement upon termination, courts will often default to common law principles, which can mean months, and sometimes years, of pay in lieu of notice.
Why This Matters for Businesses
The absence of clear contractual terms can increase risk, particularly when:
- Long-term workers are terminated
- Roles evolve over time without updated agreements
- Compensation structures are informal or inconsistently documented
Key Considerations for Employers
To protect your business, consider the following:
- Have written employment agreements in place
- Include enforceable termination clauses
- Review agreements regularly
- Update contracts when roles change
- Ensure compliance with current legislation and case law
Why Work with a Paralegal?
For many small business owners, cost is a key concern. Engaging a paralegal can be a practical and cost-effective solution. Paralegals experienced in employment matters can:
- Draft and review employment agreements
- Identify outdated or unenforceable provisions
- Help reduce legal risk before issues arise
- Provide representation in employment-related disputes before the Ministry of Labour, Human Rights Tribunal and the Small Claims Court
This means that if a dispute arises, such as a termination, ESA complaint, or human rights issue, you may be able to work with the same professional from contract drafting through to representation, often at a lower cost than traditional legal services.
Final Thoughts
Employment agreements are not a “set it and forget it” document. They are a critical tool in managing risk and protecting your business.
Contact Sicotte Guilbault for a proactive review today, that can help you to avoid significant liability tomorrow.
