The Shift from Handshakes to Contracts: Adapting to Economic Realities

In the past, Squamish operated on a more informal basis, where verbal agreements were common practice. However, with the town’s expansion and increasing economic complexities, these casual arrangements can lead to significant challenges. As Kelly fortune, a lawyer with Race & Company, aptly puts it: The reason that we’re giving this talk is that Squamish is a town that has been run on a handshake agreement. This approach, while once suitable, now poses risks in an evolving business landscape.

Fortune is scheduled to speak at a Squamish Chamber of Commerce event, addressing these critical issues. Her presentation, titled “From Hire to Farewell,” aims to equip local businesses with the knowledge to navigate the legal intricacies of employment, particularly concerning terminations. The event is scheduled for April 8.

The necessity for this shift is further underscored by current economic uncertainties. Fortune notes, And with the economic uncertainty right now, especially with the border and the tariffs … it’s a pretty critical time that employers in town start to [take] a proactive approach to employment issues, especially with regard to termination. This proactive stance is essential for mitigating potential disputes and ensuring fair treatment for all parties involved.

Understanding Termination Laws: Statutory vs.Common Law

When it comes to terminating an employee, employers must be aware of their legal obligations. While employers generally have the right to terminate employment for non-discriminatory reasons, they are obligated to provide adequate notice or compensation. This obligation stems from two sources: statutory requirements and common law principles.

The Employment standards Act outlines the minimum requirements for notice or pay in lieu of notice. As an example, an employee terminated after three months but less than a year of service is entitled to at least one week’s notice. These statutory provisions are often well-understood by both employers and employees.

However, many employers are less familiar with the concept of common law notice, which can significantly increase their financial exposure. Fortune explains, That’s based upon what is reasonable in the circumstance, having regard to the employee’s age, position, length of service, experience, education—all those factors—and this is a subjective analysis, and so this is where the legal risk really lies. This subjective assessment considers various factors related to the employee and their role within the company.

The potential financial implications of common law notice can be substantial. As what an employee thinks is reasonable versus what the employer thinks is reasonable is going to be vrey different. And depending on those factors, the court could award up to two years of common law notice (or pay) in addition to statutory requirements. So this, depending on the employee salary, could have detrimental impacts to a small business if they do this incorrectly. This highlights the importance of seeking legal advice to determine a fair and reasonable notice period.

Mitigating Risk with Employment Contracts: A Proactive Strategy

The most effective way to minimize legal risks for both employers and employees is to establish a well-drafted employment contract from the outset.These contracts provide clarity and certainty, outlining the terms and conditions of employment, including termination provisions.

fortune emphasizes the need to move away from informal practices: So that is what we’re trying to get away from—this ‘pleasant’ approach that Squamish has always had, and move to more of a, ‘let’s get this agreement in writing from the outset, while the relationship is good,’ and then both parties can ensure that they’re being treated fairly and to avoid uncertainty down the line. By formalizing the employment relationship, businesses can avoid potential disputes and ensure compliance with legal requirements.

Consider the example of a local construction company that hired a project manager based on a verbal agreement.When the project manager was later terminated, a dispute arose over the appropriate notice period. Without a written contract, the company faced significant legal costs and potential damages. This scenario underscores the importance of having a clear and enforceable employment agreement.

Documenting Performance and Conduct: Essential for With-Cause Terminations

In cases of with-cause terminations, where an employee is dismissed for serious misconduct, proper documentation is crucial.Employers must have clear company policies, ensure employees are aware of these policies, and meticulously document any performance issues or disciplinary actions.

fortune advises, Our biggest tip with regard to just-cause terminations is to make sure that you have company policies. Make sure that your employees are aware of those company policies that clearly set out the expectations you have for them, and making sure that you’re documenting everything. And that you’re communicative with your employees, so that they know what’s expected of them, and they know what they need to do to meet your company goals. This proactive approach helps to establish a clear record of the employee’s conduct and the employer’s efforts to address any issues.

She further emphasizes the importance of clear dialog and documentation: And any time that there’s a payroll issue or performance issue, that those things are well documented, and that the communication line is very clear. Without a proper paper trail, employers may struggle to justify a with-cause termination, potentially leading to legal challenges.

Imagine a scenario where an employee consistently violates company safety protocols, but these violations are not documented.If the employer later attempts to terminate the employee for just cause, they may lack the evidence to support their decision. This highlights the critical role of documentation in protecting the employer’s interests.

Navigating the Challenges of a close-Knit Community

In a town like Squamish, where personal connections are strong, initiating formal employment agreements or addressing performance issues can feel awkward. However, Fortune argues that these conversations are essential for protecting both the business and the employee.

Some of these conversations are harder to have in a town of this size, as … there’s the personal connections as well. So it’s frequently enough even more difficult to say, ‘OK, it’s time to paper this employment relationship,’ but I think you’re just protecting your business. And, with regard to the employment contract, it’s protecting the employee just as much as it’s protecting the employer. By prioritizing clarity and fairness, businesses can maintain positive relationships while ensuring compliance with legal requirements.

The Evolution of Employment Agreements in Squamish

Historically, Squamish’s close-knit community relied on handshake agreements, fostering trust adn simplicity. However, as the town’s economy diversifies and grows, these informal practices are proving inadequate. The need for clear, written contracts has never been more pressing.

Local legal experts emphasize the importance of this transition. As Kelly Fortune, a lawyer with Race & Company, notes, “Squamish has been run on a handshake agreement. It’s time to move to more of a, ‘let’s get this agreement in writing from the outset, while the relationship is good.'” This proactive approach helps prevent misunderstandings and legal disputes.

Understanding the Legal Landscape: statutory vs. Common Law Termination

Employers must navigate both statutory requirements and common law principles when terminating an employee.Statutory laws provide minimum notice periods, but common law can extend these periods based on various factors, including the employee’s age, position, and length of service.

As an example, an employee terminated after three months but less than a year of service is entitled to at least one week’s notice under statutory law. However, common law considerations can lead to notice periods of up to two years, depending on the circumstances. This underscores the importance of understanding both legal frameworks to mitigate potential financial risks.

Proactive Strategies: Mitigating Risks with Employment Contracts

Implementing well-drafted employment contracts is a proactive strategy to minimize legal risks.These contracts provide clarity on terms and conditions, including termination provisions, ensuring both parties are aware of their rights and obligations.

Fortune advises, “Let’s get this agreement in writing from the outset, while the relationship is good.” This approach not only protects the buisness but also fosters a clear and fair working environment for employees.

Consider a local construction company that hired a project manager based on a verbal agreement. When the project manager was later terminated, a dispute arose over the appropriate notice period. Without a written contract, the company faced meaningful legal costs and potential damages. This scenario highlights the critical importance of formalizing employment relationships to prevent costly disputes.

Documenting performance and Conduct: Essential for With-Cause Terminations

In cases of with-cause terminations, where an employee is dismissed for serious misconduct, proper documentation is crucial. Employers must have clear company policies, ensure employees are aware of these policies, and meticulously document any performance issues or disciplinary actions.

Fortune emphasizes, “Our biggest tip with regard to just-cause terminations is to make sure that you have company policies. Make sure that your employees are aware of those company policies that clearly set out the expectations you have for them, and making sure that you’re documenting everything.” This proactive approach helps establish a clear record of the employee’s conduct and the employer’s efforts to address any issues.

Without proper documentation, employers may struggle to justify a with-cause termination, potentially leading to legal challenges. For example, if an employee consistently violates company safety protocols, but these violations are not documented, the employer may lack the evidence to support their decision to terminate the employee for just cause.

Embracing Formal Agreements in a Close-Knit Community

In a town like Squamish, where personal connections are strong, initiating formal employment agreements or addressing performance issues can feel awkward. However, these conversations are essential for protecting both the business and the employee.

Fortune argues, “Some of these conversations are harder to have in a town of this size, as there’s the personal connections as well. So it’s frequently enough even more difficult to say, ‘OK, it’s time to paper this employment relationship,’ but I think you’re just protecting your business. And, with regard to the employment contract, it’s protecting the employee just as much as it’s protecting the employer.” By prioritizing clarity and fairness, businesses can maintain positive relationships while ensuring compliance with legal requirements.

Looking Ahead: The Future of employment Practices in Squamish

As Squamish continues to grow and diversify, the trend towards formal employment agreements is expected to accelerate. Businesses that proactively implement clear contracts and robust documentation practices will be better positioned to navigate the complexities of employment law and foster positive working relationships.

By embracing these practices, Squamish businesses can not only protect themselves legally but also contribute to a more transparent and fair employment landscape in the community.

Frequently asked Questions (FAQ)

Why are formal employment agreements important in Squamish?

Formal agreements provide clarity on terms and conditions, reducing the risk of misunderstandings and legal disputes as the town’s economy grows and diversifies.

What is the difference between statutory and common law termination?

Statutory law outlines minimum notice periods for termination, while common law considers various factors to determine reasonable notice, potentially extending beyond statutory requirements.

How can businesses mitigate risks associated with employment terminations?

By implementing well-drafted employment contracts and maintaining thorough documentation of performance and conduct, businesses can minimize legal risks and ensure fair treatment of employees.

What challenges do Squamish businesses face in adopting formal employment agreements?

In a close-knit community, initiating formal agreements can feel awkward due to personal connections. However, these conversations are essential for protecting both the business and the employee.

What is the future outlook for employment practices in Squamish?

As Squamish continues to grow, the trend towards formal employment agreements is expected to accelerate, with businesses that proactively implement clear contracts and robust documentation practices being better positioned to navigate employment law complexities.

Did You Know?

Implementing formal employment agreements can substantially reduce the risk of costly legal disputes, providing peace of mind for both employers and employees.

Pro Tip

Regularly reviewing and updating your employment contracts ensures they remain compliant with current laws and accurately reflect the evolving nature of your business.