05 Aug What should employees watch out for in a fixed-term contract?
If you are an employee who is applying to fixed-term contract jobs, there are some defining features of your Employment Agreement you should look out for.
A fixed-term contract is an employment contract that defines a work position that has a pre-scheduled termination date. The employer will outline the position, hours, wages, and the exact work period they expect their new hire to fulfill.
A fixed-term contract is slightly different from an indefinite contract (usual Employment Agreement that has no planned termination date). It includes terms and conditions that answer to specific cases that could arise in this employer-employee relationship that an indefinite term contract does not require. Because of this differentiation, there are several conditions that an employee should monitor when reviewing their contract.
First, pay attention to the length of your fixed term. The Employment Standards Act, 2000 (ESA), outlines rules that an employer must follow for a legally acceptable fixed-term contract that is greatly dependant on the length of the scheduled period. The ESA indicates that fixed-term employees can receive notice or pay in lieu of notice if their fixed period is one year or more, if they are terminated early, or if their fixed period has been prolonged more than 90 days after their originally scheduled termination date.
Further, employees can be entitled to certain benefits only after they have worked for their employer for more than twelve months. For example, employees are only entitled to vacation pay when they have worked for one employer for a period longer than twelve months.
Second, make sure to read and understand your position and the definition of your role. Employers try and create a more generalized definition so that if small changes in your work role need to be made, it is within their contractual rights to do so. Make sure you understand their curated description and whether it is pushing beyond your expectations and skill level for the job.
Third, pay close attention to whether there is a termination clause. A termination clause is added to a fixed-term contract because if an employer needs to end the contract early, it ensures that they can proceed seamlessly without any legal obligation to necessarily complete the contract. Make sure to review what is included in the termination clause as well. How long of a notice or pay in lieu of notice do they guarantee?
Third, is the contract automatically renewable? If the contract is scheduled to last for a twelve-month period with an automatic renewal, the job could continue for greater than that first twelve-month period. With an automatic renewal, it is simplifying the process while also having the potential to create some liability issues. Make sure you and your employer have good communication. It may be beneficial to ask, before your termination date arrives, if the employer plans on keeping you on the job for another term.
Fourth, if you have multiple contracts over multiple fixed-term periods, the courts could recognize this as an indefinite term contract, even though you have always encountered fixed-term contracts.
Hiring an employment lawyer to review your employment contract is extremely important, because understanding its terms, conditions, and your rights under the ESA and contract law is a complex task and one that employment lawyers are well versed in. If you have received a fixed-term contract from your employer, please contact KCY at LAW by filling in an online consultation request or contact us by phone at 905-639-0999 to book your consultation today.