Employment contracts Canada

What should an employment contract in Canada include?

Listed below are the key elements of every compliant employment contract in Canada:

• Both parties’ personal information, including names and contact details.
• Job position and a detailed description of the responsibilities, duties and rights.
• Salaries, wages, and benefits the employee is entitled to.
• Working hours and days of the week.
• Policies for termination of employment, including notice periods and severance pay if applicable.
• Confidentiality and non-disclosure policies to protect the employer’s interest.

It’s important to note that the employer and the employee must read, comprehend, and agree to each of the contract terms before providing their signatures.

What types of employment contracts exist in Canada?

The following is a list of the most important employment contracts in Canada:

1. Employee contracts

There are 2 major types of contracts under this category:

• Permanent employment contracts: Permanent employment contracts have an indefinite duration and are the most common type used by Canadian employers. As such, they provide employees with benefits such as healthcare, annual salaries, and different types of bonuses. Permanent employment can be terminated by following the mandatory notice period within the contract.
• Fixed-term employment contracts: In contrast to permanent contracts, fixed-term contracts have a pre-determined duration and are commonly used to cover temporary shortages of employees. Fixed-term employment contracts are effective until the upon-agreed end date and can be extended or renewed with a mutual agreement between the employer and the employee.

2. Seasonal employment contracts

Seasonal employment contracts are used to hire employees to cover the rising workforce demand in specific seasons of the year. These contracts are very typical for industries such as hospitality, tourism, and agriculture and must specify crucial employment terms such as duration of employment, salaries, and policies for termination before contract expiration.

3. Independent contractor agreements

Independent contractor agreements are commonly used to hire freelancers and independent workers who provide services for a certain fee. These individuals are not classified as regular employees and, therefore, are not entitled to any contributions or benefits paid by the employer. 

How to hire employees in Canada? 

Businesses seeking to hire employees in Canada must understand and adhere to the country’s labour regulations concerning aspects such as minimum wage, benefits, work hours, termination policies, and other vital requirements.

Furthermore, employers are also obligated to establish a legal entity, obtain a tax identification number, and set up a local bank account before they can hire anybody in Canada.

To simplify the process of recruiting workers in Canada, employers can leverage the expertise of global expansion companies like Native Teams. By choosing our Employer of record solutions, you can have the confidence that your payroll, taxes, and HR administration are diligently handled in full compliance.