Employment Contracts in BC: What Small Businesses Get Wrong

Many small businesses use employment contracts. But having a contract isn't the same as having one that holds up. Across BC, employers are relying on outdated templates, generic language, or agreements that don't meet legal requirements. When that happens, the contract may not protect you at all. In some cases, a vague or poorly worded contract can actually put you in a worse position. And the cost can be significant.

1. Termination Clauses That Don't Hold Up

This is one of the most common issues. If a termination clause does not meet minimum employment standards requirements, it can be unenforceable. When that happens, you're no longer limited to minimums — you may be exposed to common law notice, which is often much higher.

Some employers avoid including clear termination language because they're concerned it may turn off a potential hire. In reality, leaving it out — or softening it too much — creates far greater risk for the business. Serious candidates who intend to perform well typically do not object to clear, legally sound termination language.

2. Using Generic or Outdated Templates

Many contracts are copied from old company templates, online sources, or other businesses. The problem is they often don't reflect your business, don't match the role, and don't align with current legal standards.

3. Missing or Vague Key Terms

Contracts often leave out or gloss over important details, such as compensation structure (salary, bonus, variable pay), hours of work and overtime expectations, probationary periods, and job responsibilities. When expectations aren't clear, issues show up later.

4. Contracts Signed Too Late — Or Not At All

An employment contract must be signed before the employee starts work. If it's signed after employment begins, it may not be enforceable. Many employers don't realize this until it's too late.

5. Updating Contracts Without Proper Consideration

Employers sometimes update employment contracts after an employee has already started — often when there's a title/role change, or updated terms. The assumption is that issuing a new contract is enough. It's not. In many cases, changes to an existing employment agreement require consideration — something of value provided in exchange for the new terms. Without it, the updated contract terms may not be enforceable.

6. Lack of Clarity Around Temporary vs. Ongoing Employment

Another common issue is unclear or poorly structured temporary employment agreements. Employers may intend for a role to be temporary — but if the contract language isn't clear, the employment relationship may be treated as ongoing. In BC, fixed-term or temporary contracts need to be clearly defined. If they're not, or if they're repeatedly renewed, they may be interpreted as indefinite employment.

Final Thought

Employment contracts are one of the simplest ways that BC employers can reduce risk — but only if they're done properly. It's easy to feel confident when you're hiring someone and everything looks promising. But five years down the road, things can change. If your contract isn't clear and enforceable, you may be facing termination costs in the tens of thousands — sometimes more. Getting it right upfront is far simpler than dealing with the consequences later.

Senterra HR helps BC businesses develop clear, practical employment contracts that reflect real workplace expectations — and hold up when it matters.

Also see: Probation and Termination in BC: What Employers Owe — what happens when a contract doesn't limit your exposure.

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