Not all contracts are created equal. Many employers mistakenly insert “boiler-plate” language into their employment agreements, only to find it unenforceable down the road. Canadian courts have held that uncertain or ambiguous language found in an employment contract should be interpreted in favour of the employee. Therefore, an effective contract should be drafted with clear and concise language to avoid any future interpretation issues.
Furthermore, termination clauses should always be drafted in compliance with applicable employment legislation. Although an employer can limit an employee’s entitlement to further severance under the common law, an employer cannot contract out of the statutory minimums governing termination notice (or pay in lieu of notice) as set out in the Alberta Employment Standards Code. Contracts that attempt to provide less than the statutory minimum termination notice to employees will not be found enforceable by a court.
Finally, many employers get into trouble when they try to alter the terms of employment without notice or consent or ask an employee to sign a new employment contract without valid consideration, which can undermine the validity of the contract and also leave an employer open to a potential constructive dismissal lawsuit. Therefore, the context and timing surrounding the signing of the employment agreement can become quite relevant in determining whether a binding contract is in place.