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Employment Contracts

By Miki Ackermann, Talent and Culture Works and George Waggott, George Waggott Law

As a consequence of high inflation, small to mid-sized businesses are struggling to match financial projections, and some are considering permanent layoffs.

There are alternatives to layoffs, such as reducing work hours, voluntary or mandatory time off, temporary salary reductions, bonus and salary increase freezes, cutting non-essential spending, hiring freezes, negotiating with suppliers, and temporary layoffs or furloughs.

Nonetheless, sometimes permanent layoffs are necessary. If you are considering this approach, be aware, layoffs can trigger feelings of anxiety and perceptions of job insecurity amongst your remaining staff, which is why it is important to have sound communication and change management plans to protect your business, culture, and remaining staff.

Importantly, well-drafted employment contracts can help you navigate the permanent or temporary layoff process easier.

A well worded, up to date employment contract can protect your business and your staff. It can provide clarity on the rights and responsibilities of both you, as the employer, and your staff and reduce the risk of legal claims on you in the event of a temporary or permanent severing of the working relationship.

Items to include in the employment contract:

  1. Job title along with the names of the parties, a job description that outlines job responsibilities, competencies, and expectations.

  2. Compensation, include any bonuses and benefits, as well as how and when payment will occur.

  3. Start date, hours of work, probation period, and the duration of the contract (if applicable).

  4. Any conditions of offer (e.g., reference checks, background checks, driver’s license, etc.)

  5. Privacy and confidentiality clauses, as well as restrictive covenants if the employee is in a category that is legally permitted to sign a restrictive covenant.

  6. A temporary layoff clause.

  7. A termination clause.

  8. The date that you expect the contract to be signed and returned to you, allowing time for your candidate to consider the agreement and obtain advice prior to responding to the offer

As you can see, an employment contract lays out all essential aspects of the working relationship, including the inevitability of ending the relationship.

Given your company is unique, you will want to draft individualized contracts based on the business you are in, where you conduct business, where your employee will work from, and their relationship with your company. We recommend you keep your employment contracts up to date as legislation changes quickly and case law is always in flux.

For more information about George Waggott Law, please see:, or contact:

For more information about Culture & Talent Works, please see:

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