What is an Employment Contract?
Individual contracts of employment are generally governed by the Civil Code of Quebec (the “C.C.Q.”). Under the C.C.Q., it is a contract by which an employee undertakes, for a limited time and for remuneration, to do work under the direction or control of the employer.
This highlights the key components of individual contracts of employment:
An employee who performs work;
For a certain time;
In exchange for remuneration;
Under the direction or control of the employer.
How Long Does an Employment Contract Last?
Employment contracts can be fixed-term or indeterminate period contracts.
A fixed-term employment contract generally ends upon the fulfillment of a condition. For example, it can end on a specified date, or after a specific project finishes. Draft the description of the event triggering the end of employment using clear and precise language. Any ambiguity may result in an interpretation that it is an indeterminate-period contract. For example, an employment contract that states it will last “approximately 48 months” or “if the employee does not meet the requirements of the position” may not be precise enough to be a fixed-term contract.
It's noteworthy to mention that in some cases the courts held employers responsible for paying an employee's wages up until the end of the contract. This is even though the employee wasn't working anymore. This scenario depends on the reason why an employee is no longer employed but is something to consider when drafting the employment contract.
On the other hand, an indeterminate contract has no end date. However, the definition of an employment contract states that the employee undertakes for a limited time to do work. While a contract may be for an indefinite time, it is not a contract for life. As long as both employer and employee are fulfilling their obligations, an indeterminate contract may last for years. There are ways to terminate an indeterminate contract, such as giving notice of termination (we cover this below).
What are the Obligations of the Employer and Employee?
The employers’ and employees’ responsibilities are generally listed in the employment contract. This includes what the employer is responsible for providing, and the duties the employee is expected to undertake. Each party’s obligations also extend to what isn’t written based on the customs, what is "implied", or what is “taken for granted” given the nature of the employment.
The basic obligations of the employer include:
Providing the work;
Remunerating the work;
Ensuring the safety of the employee; and
Safeguarding the dignity of the employee.
The basic obligations of the employee include:
Performing the work with prudence and diligence;
Respecting the rules of the employer;
Acting faithfully and honestly; and
Not using any confidential information.
These obligations continue for a reasonable time after the employee leaves employment, and last forever in matters regarding the privacy and reputation of others.
How is the Employment Contract Terminated?
An employment contract may end by giving notice of termination, through either party’s impossibility to fulfill their obligations (force majeure), at the end of the term for fixed-period employment, or by the death of the employee.
Notice of Termination
In indeterminate employment contracts, either the employer or employee may terminate it by giving notice of termination. The notice period is based on a “reasonable time”. What is reasonable will vary from one situation to another. The party giving notice must consider the nature of the employment, its specific circumstances, and how long the employee has been employed, among other factors.
Impossibility to Fulfill Obligations
The inability to fulfill an obligation, resulting from a force majeure circumstance over which neither party has control, also terminates the employment contract.
For the employee, this could result from a physical or psychological ailment that is incurable or long-term. Furthermore, depending on how they were injured, other employment laws may be applied in addition to Charter rights. It’s best to speak with an employment lawyer before deciding whether an employee’s situation would give rise to terminating the employment contract. For the employer, it could be an event such as a natural disaster, or flooding which renders them incapable of providing the employee with work. In the context of the COVID-19 pandemic, the temporary or partial stop to business activities is unlikely to be considered sufficiently making it impossible to fulfill obligations.
End of Term of a Fixed-Term Contract
When fixed-term contracts are clearly and precisely worded, there is no need for either party to provide notice of termination since the contract addresses this scenario in advance. The contract will be automatically renewed if an employee continues working for five days after it expires without the employer objecting. When the terms are renegotiated, it becomes a new employment contract for an indefinite period.
Death of an Employee
The death of the employee will end the employment contract. It will not be affected by the death of the employer, because the succession will be responsible for the employer's side of the obligations.
We can help draft, review, or negotiate your employment contract. Get in touch with us today to discuss your situation.
This blog post is not legal advice and is for general informational purposes only. Always speak with a lawyer before acting on any of the information contained herein.