In Ontario, any agreement for an employee to perform work on behalf of an employer creates an employment relationship. When hiring new employees, employers will usually set out the specific terms of that employment in writing for the employee to agree to. The employer would then have a written record of the employee’s job duties, start date, and other obligations agreed to. Employers additionally tend to update or amend employment agreements over time to ensure they remain compliant with any changes to the law. However, there are cases in which an employee may not have a signed written employment agreement with their employer. As such, those employees may have concerns over whether they are legally able to work without a written agreement.

Are You Able to Work Without a Contract of Employment?

Employees without a written employment contract have nothing to worry about, as they are legally able to work for their employer. In this situation, the employment relationship would operate under a verbal employment contract. The verbal employment agreement will contain implied terms of employment that are governed by the Employment Standards Act, Ontario Human Rights Code, and the common law.

The protections found in the Employment Standards Act can apply to employees working under a verbal employment agreement, although in some cases the common law would apply instead. The employer would still be required to provide a workplace environment free from discrimination to avoid violating the employee’s Human Rights.

Potential Risks Of Working Without a Contract of Employment

Employers and employees should keep in mind that if the terms of the employment relationship are not found in writing, it may be difficult to prove the existence of certain terms should a dispute arise. The Court would have to make a decision on the existence of certain terms based on the credibility of those involved, which can be highly subjective.

The lack of a written employment contract can also prevent the employment relationship from being strictly governed by the Employment Standards Act. The law confirms that an employee with a verbal employment agreement is entitled to common law reasonable notice upon the dismissal of their employment. Common law reasonable notice can be significantly higher, and more costly, than the notice of termination set out in the Employment Standards Act.

Implementing A Written Employment Agreement

Where an employee has commenced employment under a verbal employment agreement, employers should tread carefully before attempting to implement a written agreement to replace it. If an employer tries to limit the employee’s entitlements under the common law created by the verbal employment agreement, the implementation of a written replacement agreement could be considered a constructive dismissal. Employers should speak with an employment lawyer prior to the implementation of a new written employment contract or the dismissal of an employee working under a verbal employment agreement.

Contact Achkar Law

If you are an employee and have questions related to your verbal employment agreement or an employer with employees operating under a verbal employment agreement, our team of experienced workplace lawyers at Achkar Law can help.

Contact us today at 1 (800) 771-7882 or email [email protected], and let us help you find the solutions you need to move forward.

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