Human resources (HR) can encompass a myriad of elements that build, support and drive the employment experience within an organization. From employee engagement to training and performance management, HR can be a creative and strategic partner in making your business thrive. However, and while not seemingly as exciting or sexy, one of the key elements that the HR function should first bring to your business are the basics; solid foundational pieces that protect, outline and set parameters around the working relationship between employer and employee. Two of these key foundational pieces that are always recommended and believed to be the most important documents for a business to utilize, are the employment contract and employment handbook.
The importance of the employment contract – it’s BIG!
To best understand why a strong, legally sound employment contract is important, let’s look at the risks of not having such an agreement in place.
- Failure to not use a properly drafted agreement can expose a business to significant confusion regarding employer and employee expectations resulting in conflict, disengagement and turnover.
- The cost to terminate an employee is approximately 75% higher when you do not have an employee agreement with well laid out termination provisions, or if the contract is poorly written and deemed unenforceable.
- An agreement signed on or after the employee’ start date is rarely seen as enforceable in a court of law and exposes the employer to greater risk.
As you can see, a comprehensive, legally sound contract is important for both employer and employee; setting out expectations, reducing confusion over key employment elements and protecting the business should the relationship go south. To avoid the above, and set out on the right foot from the moment of hire, we recommend the following:
- All employees should have a contract in place regardless of whether they are full-time, part-time, hourly, salary, fixed-term, student, etc.
- • Every contract should be signed before the employee’s start date; and the employee must be given ample time for contract review and consideration to be upheld in court before having to sign.
- Contracts should be formally updated when there is a change in the employee’s status (i.e. a promotion, salary increase, etc.).
- Contract should be legally sound, but use simple language that all parties can understand.
- Contract must always use minimum employment standards as a starting point for their employment clauses.
- Contact should set out the terms and conditions of employment as well as those obligations that survive the employment relationship i.e. confidentiality and non-solicitation clauses.
- Contract should include a strong termination clause that clearly outlines the employer and employees’ obligations as it relates to termination. A detailed termination clause will protect the business from paying more than is legally required or agreed to upon termination of an employee. When your clause is weak, courts often rule in favour of the employee and according to Common Law, which awards the employee a higher termination payout versus basic employment standards.
Once you have a professional, thoroughly drafted contract in place they are easy to use, implement and will be a key tool in your employer toolkit!
Need more convincing? An often-overlooked benefit, that is important to note is that having each employee on a strong employment contract can enhance the value for a business which means more money for the owner(s) in the event of sale of your practice!
One clause we always include in our contract is how the contract interacts with the employee handbook. Why is this important? Let us dive in!
Do I need an employee handbook? Simply put: YES!
Similar to the employment contract, an employee handbook is important in how it can protect a practice as it clearly states and outlines employment policy; both best practice as well as those required by provincial employment laws. In addition, they are critical in providing a framework for how the employer wishes their business to run; clearly outlining expectations that ensure decreased confusion, and conflict as well as setting the tone for performance and culture within the practice.
The below are our recommended handbook policy basics. Handbooks can also be customized to fit the needs of each individual practice.
- Workplace health and safety
- Workplace harassment
- Workplace violence
- Progressive discipline
- Performance management
- Attendance and absenteeism
- Vacation & public holidays
- Sick or personal days
- Conflict of interest
- Alcohol and substance abuse
- Hours of work and overtime
- Work and team events
- Dress code
- Performance reviews
- Dealing with patient complaints
Want to ensure your handbook has impact and is enforceable?
Ensure each new hire reads and signs off on your handbook at the start of their employment. For current employees have each read and sign off on the handbook, or at least identified additions or handbook changes, annually. Keep this in their employee file.
While employment contracts and handbooks may not be fun and exciting and may invoke concern over creating a rule bound workplace, they are very much critical, needed tools that can protect both parties and ensure a smooth employee/employer relationship! Communicating how they are beneficial to the employee can be helpful to temper resistance.
Looking for more information or want help in protecting your practice? Brite Hive HR is here to help (and we do find contracts exciting!).
About the Author
Tannis Jarvis, HR, Strategy & Talent Lead at Brite Hive HR, a boutique HR consultancy and recruitment agency specializing in the dental industry and small business. They are a team of results-oriented, innovative, and enthusiastic HR and recruitment professionals who understand the time and energy you put in to running a successful dental practice.