Keep Your House In Order

Woodbridge corporate and securities lawyer, Joseph Chiummiento, of Core Lawyers, provides tips for using key legal agreements to protect your business so that you can take every opportunity to grow your business without legal distractions.

Types of Agreements

We often assist companies in the preparation of legal agreements such as employment agreements, contractor agreements, consulting agreements, services or sales contracts.  As your company gets bigger and sales increase, the level and complexity of these agreements will change.

For example, construction companies often use CCDC or CCA standard form agreements for their projects which often require changes to ensure clarity and protection.  Pre-IPO and early stage Tech companies and Mining companies have very specific IP protections and service provider agreements that define who owns what and how payments are to be made.

Do I need a Contract?

The answer is almost always “yes”; simply because the idea behind having contracts in place is certainty.  Setting the boundaries of a relationship is important to ensure all parties know where they stand. That most often includes setting clear payment terms, default terms and things such as confidentiality, privacy regarding personal information and termination to protect everyone involved.

Having employment contracts in place can protect businesses from having to provide extended “notice” or “pay in lieu of notice” to employees that have been with the company for extended periods of time.  An employee with no contract could be entitled to “reasonable notice” which the Courts in Ontario have determined can be to up to one month per year of service.  A five year veteran employee could be entitled to up to five months.

Employment Contracts – An Example

When terminating an employee there is a requirement to give notice under:

1. Employment Standards Act (ie. 1 week per year to a maximum of …. 16 weeks )
2. Contract Notice (ie. your contract says if terminated you get no less than X months notice…)
3. Common Law – where there is no contract or agreement saying 1 and 2 above is sufficient then you get the right to Common Law notice (ie. 1 month per year of service)

Providing notice does not apply in situations where there is “cause” to fire, most notably – theft, but there are others.  Notice means you have to advise the person that i.e. “in 6 weeks you will no longer have a job….”, and they are supposed to work for that time period.  If you choose not to have them work then you can pay them for that 6 weeks – this is known as “pay in lieu of notice”.

Use key legal agreements to clarify roles, set boundaries and ensure everyone’s expectations are aligned.  Having these in place will give you confidence your “house” is in order and allow you to focus on growing your business. A lack of clarification can lead to lawsuits that control your time and drain your money, all of which can be avoided by using key legal agreements.

Feel free to contact me, and we can review what types of agreements your business may need to grow and be protected along the way.

Direct Line: 905.851.8180 ext. 2
Email: joseph@corelawyers.ca