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Originally Posted On: https://sdlawtimmins.com/employment-contracts-vs-employment-policies/

Two vital sets of documents to the employer/employee relationship are the employment contract and the employment policies. It is important to know the difference between these documents and how they may affect you, whether you are an employer or an employee.

Employment Contract

The employment contract is the foundation of the employment relationship. There are three components that make up the employment contract:

1. The offer of employment
2. The acceptance of the offer of employment
3. The exchange of consideration between the parties

The Offer:

The offer sets out the terms the employer is prepared to agree to, and it signals the employers intention to be legally bound.

The Acceptance:

Acceptance can take the form of verbally accepting the offering, accepting the offer in writing, or accepting the offer through conduct, such as a handshake. Once an offer is accepted by the employee, it becomes an employment contract and cannot be withdrawn.

The Consideration:

Consideration is the element of exchange between the employer and employee that makes the contract legally enforceable. The most common form of consideration in the employment relationship is the employer exchanging wages for the services of the employee.

Consideration is also required if there are amendments made to the terms of the employment relationship or offer. This type of consideration must be something of value the employee was not already entitled to, such as wage increase, signing bonus, or additional vacation days.

It is important to know, that there is always an employment contract, even if there is no formal written and signed agreement. It is good practice, as an employer, to never permit an employee to begin working before they have signed the acceptance of the letter of offer or signed the employment contract.

Employment Policies

Employment policies and manuals set out guidelines and procedures in a wide range of routine and administrative areas such as attendance, dress core, use of company property, use of social media, and dispute resolution. However, employers cannot implement procedures or polices that unilaterally amend fundamental terms of the employment contract such as salary or hours of work without the employee’s consent.

In order to be an enforceable policy or manual it requires:

1. Consistent with the terms of the applicable employment agreements and laws
2. Reasonable in terms of what actions are required by the employees
3. Clear and unequivocal as to what steps are required by employees to comply
4. Adequate notice given to employees of upcoming changes to the policies
5. Consistent application and enforcement from the time the policy is implemented

These policies and manuals are meant to create reasonable expectations for the employees and the employers are expected to follow the procedures set out in them. Policies and manuals should be referenced in the employment contract, so the contents of the policies and manuals become express terms of the contract.

Connect With Suzanne Desrosiers Professional Corporation

If you are an employer or an employee and have any questions about employment contracts or employment policies, please feel free to reach out to Suzanne Desrosiers Professional Corporation by calling us at (705) 268-6492 or emailing us at [email protected] and we would be more than happy to help!