Free Canada Employment Contract Agreement Template

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Employment Contract Agreement + Accompanying Instructions for HR  

Essential employment contract agreement template for hiring in Canada

A well-drafted employment agreement is essential for clearly defining the terms of employment, protecting both employer and employee, and ensuring compliance with Canadian labor laws. Without a proper contract, businesses risk misunderstandings, legal disputes, and financial liabilities.

Our employment agreement template provides a legally sound and customizable contract that outlines key terms such as compensation, job duties, confidentiality, termination conditions, and compliance with employment standards.

Important Updates to the Employment Agreement Template

Termination Clauses

The Employment Contract Agreement template has been updated to incorporate language changes resulting from several important court cases where language in termination clauses was challenged by the employee and the court found in their favour.  Namely: 

• Waksdale v. Swegon North America Inc., 2020 ONCA 391 (CanLII)
• Dufault v. The Corporation of the Township of Ignace, 2024 ONSC 1029   

Work Location

The employment agreement template also clearly identifies the employee's work location, particularly useful if you don't allow remote work. Or if you do, the new clause clearly defines the parameters. 
Why?  During the pandemic, remote work became widespread, but now with businesses mandating a return to in-office work, those contracts are in the spotlight. Companies that had clear contract clauses in which the default is coming into the office five days a week were in a much better legal position to say, ‘We are mandating a return to normal.’"

What’s included in the template?

This contract template covers all essential elements required for a legally compliant employment agreement in Canada.

Key sections included

• Job title, duties, and responsibilities
• Compensation, benefits, and payroll terms
• Probationary period and performance expectations
• Confidentiality and non-disclosure agreement
• Non-compete and non-solicitation clauses
• Termination conditions and severance provisions
• Workplace policies and compliance with Canadian employment laws

Why you need it

• Acts as a 'pre-nup' in the employee-employer relationship to outline what's expected from each party during the employment relationship and what will happen once you part ways.  It's an agreed-upon set of rules that's established when both parties are on good terms and in the honeymoon phase. 
• Ensures that an employee knows what they can expect from your company.
• Ensures that the employee's terms & conditions are in writing so there are no misunderstandings.  The agreement clearly indicates that any oral promises or previous arrangements are nul and void once the employee signs the contract.
• Years, even weeks down the road, the parties often forget what they agreed upon and having your terms in writing is critical. 
• Employees are much more likely to respect your house rules when they've signed an employment agreement.
• Helps to ensure protection of your company. If an employee situation ends in litigation, you'll have a much better chance in court if you have your terms and conditions clearly laid out. 
• Helps to protect your company against the NOTMICS. 
• If used in conjunction with and if you include and attach your employee handbook as an addendum, you'll be clearly articulating conduct policies and expectations before the employee is hired that provides another layer of protection for your company.  

Who is this for?

• Small business owners – Hire employees with a legally secure contract.
• HR professionals – Standardize employment agreements to maintain compliance.
• Consultants & advisors – Provide clients with a professional, ready-to-use contract.

What you risk by not using an Employment Contract Agreement?

If you don't use employment agreements when employees are hired:

• You are at the mercy of common law which highly favors the employee. For example, if you don't have a termination clause, your liability for terminating an employee may be very high when compared to a contained liability if it's pre-determined in the employment agreement.
• Consequences for misconduct are not clearly articulated.  
• If your rules and do's and don't's are not clearly laid out, you can't expect that employees will 'just know' as the courts will often conclude.  
• Your company confidential information is at risk. 
• You may be liable for overtime pay. 
• Without a contract, the employee may claim that you promised them a bonus or other compensation.