This is Part 2 of our blog series for US employers with operations in Canada. Click here to read Part 1 if you haven’t already.

No At-Will: Contracts are a Big Deal in Canada

One of the core employment law differences between the US and Canada is that there is no at-will employment in Canada. Ever. In fact, when Canadian judges read “at-will” in a contract, they typically set aside the contract altogether and substitute in typically far more generous common law terms.

In addition, if you do not have any contracts in place, the courts will read in implied terms. This is because all Canadian employment relationships are governed by a contract under our law, whether expressly in an agreement or implied based on common law.

If an employer does not roll out a contract with their employees, the judge will imply terms and conditions that in most cases are more generous than anything the employer would have provided.

Why Contracts Matter in Canada

Contracts are a big deal in Canadian employment law for several reasons:

Next in the Series

1. Defines the employment relationship: A contract sets out the terms and conditions of the employment relationship. This includes details like the job description, salary, benefits, hours of work, and termination provisions. Both the employer and employee have a clear understanding of what is expected.

2. Legal protection: Contracts provide legal protection for both employers and employees. If either party breaches the contract, the other party can seek legal remedies.

3. Termination clauses: Contracts often include termination clauses that outline the conditions under which an employee can be dismissed. This can protect employers from wrongful dismissal claims and help contain the overall exposure. This is one of the main reasons for an employer to have an up-to-date, enforceable, and reasonable contract in place.

4. Provides certainty: Contracts provide certainty and predictability for both parties. They know what to expect from the employment relationship and what will happen if things go wrong. It allows for good discussion at the start, to provide for smoother exits in our high-turnover workforce.

Stay tuned for my next post in this series about Canadian terminations in an anti-at-will environment.

If you are a US employer with employees in Canada, we’d love to work with you. Get in touch!