A well-drafted employment contract protects both employer and employee. Here is what BC law requires, what you should always include, and what clauses can backfire.
Every time a BC employer hires someone, an employment contract is formed — even if nothing is written down. The question is not whether a contract exists, but whether its terms protect both parties when things go wrong. A verbal offer and a handshake create an employment relationship, but they leave the most important terms — notice of termination, overtime, confidentiality — entirely to BC's default rules and the courts.
Here is what BC employers need to know about employment contracts.
## The Legal Foundation: BC Employment Standards Act
The Employment Standards Act (ESA) sets the minimum standards for most BC employees: minimum wage, overtime pay, statutory holidays, annual vacation, and termination notice. An employment contract cannot give an employee less than the ESA minimums — any clause that tries to is void and unenforceable.
Common ESA minimums employers overlook:
- Overtime: 1.5x after 8 hours in a day or 40 hours in a week; 2x after 12 hours in a day
- Annual vacation: 2 weeks after one year; 3 weeks after five years
- Statutory holidays: 11 paid stat holidays per year (employees must qualify)
- Termination notice: 1 week per year of service up to 8 weeks for employees terminated without cause
## What Every BC Employment Contract Should Include
### 1. Position and Duties
Clearly define the role, the primary duties, and who the employee reports to. This matters if you later need to reassign duties or make a role redundant — a clear original job description helps establish whether a change is a constructive dismissal.
### 2. Compensation
Specify salary or hourly rate, pay periods, and any bonus structure. If bonuses are discretionary, say so explicitly — courts have found that employees have contractual rights to bonuses that were paid consistently, even without a written commitment.
### 3. Hours of Work
Specify whether the role is full-time or part-time, the expected weekly hours, and any flexibility or shift-work requirements. This matters for overtime calculations.
### 4. Termination Clause
This is the most important clause in any BC employment contract. Without a valid termination clause, a terminated employee is entitled to common law reasonable notice — typically one month per year of service, which can far exceed the ESA minimum.
A valid termination clause must:
- Clearly state that notice will be limited to the ESA minimum (or a defined amount that meets or exceeds the ESA)
- Be signed before the employee starts work (a clause introduced after employment starts may not be enforceable)
- Not attempt to give less than the ESA minimum for any scenario
Poorly drafted termination clauses are routinely struck down by BC courts, leaving employers exposed to common law notice obligations they thought they had excluded. Have every termination clause reviewed by an employment lawyer.
### 5. Confidentiality
A confidentiality clause protects proprietary information, trade secrets, client lists, and pricing information from disclosure. It should survive the end of employment. Employees in BC have some implied duties of confidentiality even without a contract, but an explicit clause is much stronger.
### 6. Non-Solicitation
A non-solicitation clause prohibits a departing employee from soliciting the company's clients or employees for a defined period after leaving. Courts in BC enforce reasonable non-solicitation clauses.
### 7. Non-Compete (Use with Caution)
BC courts are skeptical of non-compete clauses — they restrict an employee's ability to earn a living and will only be enforced if they are reasonable in scope (activity restricted), geographic area, and duration. A clause that says "you cannot work in the software industry anywhere in Canada for two years" will almost certainly be struck down. A clause that says "you cannot solicit our clients in Metro Vancouver for 12 months" has a much better chance.
## Probationary Periods
A probationary period (typically 3 months) gives employers the right to terminate without cause and with only one week's ESA notice if the employee is not suitable for the role. Probationary periods must be written into the contract — courts do not imply them. And employers must act in good faith during the probationary period, genuinely assessing suitability rather than using it as a pretext.
## Updating Contracts for Existing Employees
If you want to introduce a new term — a non-compete, a new termination clause, a reduced bonus — for an existing employee, you must provide fresh consideration (something of value) in exchange. Simply presenting a new contract to sign is not enough. Without fresh consideration, the new terms may not be enforceable.
## FAQs
Does every BC employee need a written employment contract?
No — a verbal offer creates a binding employment contract. But without a written contract, all material terms default to BC's Employment Standards Act minimums and common law, which often favour the employee. A written contract protects both parties.
What is wrongful dismissal in BC?
Wrongful dismissal occurs when an employer terminates an employee without cause and without providing adequate notice or pay in lieu of notice. In BC, the required notice period is the greater of the ESA minimum or the common law "reasonable notice" period — unless a valid termination clause limits it to the ESA minimum.
Are non-compete clauses enforceable in BC?
BC courts enforce non-compete clauses only if they are reasonable in geographic scope, duration, and the activities restricted. Overly broad clauses are routinely struck down. Non-solicitation clauses (restricting only client or employee poaching) are generally more enforceable.
Can I change an employee's contract without their agreement in BC?
Not unilaterally. Significant changes to employment terms — reduced compensation, new restrictions, or different duties — without employee agreement can amount to constructive dismissal, entitling the employee to terminate and claim wrongful dismissal damages.
No — a verbal agreement creates a binding employment relationship. But without a written contract, all material terms default to BC's Employment Standards Act minimums and common law, which often favour the employee. A written contract protects both parties.
Wrongful dismissal occurs when an employer terminates an employee without cause and without adequate notice or pay in lieu. The required notice is the greater of the ESA minimum or common law 'reasonable notice' — unless a valid termination clause limits it to the ESA minimum.
Only if they are reasonable in geographic scope, duration, and the activities restricted. BC courts routinely strike down overly broad non-competes. Non-solicitation clauses restricting client or employee poaching are generally more enforceable.
No. Significant unilateral changes to employment terms — reduced pay, new restrictions, or materially different duties — can amount to constructive dismissal, giving the employee the right to treat themselves as terminated and claim damages.