Offers of Employment, Job Offer Letters, and Employment Agreements

After deciding to hire an applicant, it's time to provide them with a formal job offer outlining all the associated terms and conditions. Create a comprehensive agreement that details each aspect of their employment so that there are no surprises for either side in the future.

Make the job offer

The very best way to make the offer is either in person or via telephone. Review all of the details (such as title, employment status, salary, start date, and benefits) before presenting it to your top candidate. Try not to reject other great applicants until you have come to an understanding with them - and they have confirmed their acceptance - of your offer.

Follow up with a job offer letter

Once you have made a verbal job offer, it is a good idea to follow up with an official employment agreement, which is called an offer letter. In Ontario, it is not required by law to have a written document, but it is a good idea to have one so that everyone knows what their duties are. To make sure your contract can be enforced, state that any verbal offers are only valid if the candidate signs a formal agreement and all appropriate documentation before they start work.

Types of employment agreements

Indefinite contract

This employment agreement will remain in effect until either the employee or the company deems it necessary to end the relationship, for example through the resignation of an employee or termination by a company.

Fixed-term contract

Fixed-term contracts should always have an explicit termination provision, specifying how the employment relationship can be ended by either party. This agreement type terminates on a predetermined date, meaning employers and employees alike know when it will come to a close.

Contents of employment agreement

The employment agreement should contain the following information:

• Title
• Employment status
• Compensation
• Start date
• End date (for fixed-term contracts)
• Termination clause

Other employment agreement details to consider include:

• Job responsibilities and expectations
• Reporting relationships
• Probationary period
• Work hours
• Travel requirements
• Vacation
• Group benefits
• Variable compensation (for example, bonuses, profit sharing, stock options, commission)
• Salary increases
• Restrictive covenants—including confidentiality, intellectual property, non-disclosure, non-solicitation and non-competition (usually separate agreements)

Tips on creating the employment agreement

• If you want a stronger and more secure employment agreement, get an experienced lawyer to help you review or make your standard contract. This is especially important for the part of the contract that has rules about what the employee can and cannot do.
• Before you sign the employment agreement, read it very carefully. Make sure that everything is correct and that no changes need to be made.
• Make sure your contract includes a clause that allows you to change some parts of the agreement (like job duties, how reports are produced, or group benefits) with a reasonable amount of notice and for good reasons.
• Make sure you say that the job offer is only temporary until we check with the references. This should also be written in the employment agreement.