To legally protect your business when hiring in New Brunswick, your employment contract must comply strictly with the provincial Employment Standards Act. A well-drafted agreement will clearly outline wages, probationary periods, and termination notice rules, potentially saving you thousands of dollars in future legal disputes.
Growing your business in New Brunswick is an exciting milestone, whether you are opening a cafe in Moncton or a tech startup in Fredericton. However, bringing on new staff comes with significant legal responsibilities. Many employers make the mistake of using generic templates downloaded from the internet, which often fail to align with local Canadian labour laws.
Without a clear, written agreement in place, you leave your business exposed to costly misunderstandings and wrongful dismissal claims. Relying solely on a verbal offer or a casual handshake is incredibly risky. In this guide, we will explain exactly how to draft a legally sound employment contract for your New Brunswick hires.
Step-by-Step Process in New Brunswick
Employment relationships in this province are primarily governed by the Employment Standards Act of New Brunswick. This legislation sets out the absolute minimum rules for minimum wage, vacation pay, and termination. Here is how you can build a strong contract that respects these laws.
Step 1: Clearly Define the Role and Compensation
Start by outlining exactly what the employee is being hired to do. Provide a clear job title and a brief description of their daily duties . You must explicitly state their compensation, whether it is an hourly wage or a fixed annual salary, ensuring it meets or exceeds the current New Brunswick minimum wage. Do not forget to detail exactly how vacation pay will be handled, as the law generally requires at least 4% of gross wages for new employees.
Step 2: Establish a Clear Probationary Period
A probationary period allows you to evaluate a new hire to see if they are a good fit for your company culture. In New Brunswick, the law generally allows employers to terminate an employee without providing written notice or severance pay if they have been employed for less than six months. However, your contract must explicitly state that a probationary period applies. If you fail to include this clause, common law rules might require you to pay them severance anyway.
Step 3: Detail the Termination Clauses
This is arguably the most critical part of any employment contract 📝. If you ever need to let an employee go “without cause” (meaning they did nothing legally wrong, but you simply do not need them anymore), the contract must state how much notice they will receive. The clause must offer at least the minimum notice required by the Employment Standards Act. If your termination clause is drafted poorly, a judge at the Court of King’s Bench may invalidate it and award the employee a massive common law severance package.
Step 4: Have a Local Law Firm Review the Draft
Once you have put together the basic terms, you should heavily consider having a local employment lawyer review the document. A lawyer will ensure your termination clauses are enforceable and that any non-compete or confidentiality rules are legally valid in Canada. Having a professional set up a standard template for your business is a smart, one-time investment.
Essential Contract Clauses
Beyond the basics, you should consider including specific clauses to protect your company’s unique interests. Here is a breakdown of common protective measures:
| Type of Clause | What it Protects |
|---|---|
| Confidentiality Agreement | Prevents the employee from sharing your trade secrets, client lists, or internal pricing with competitors. |
| Non-Solicitation Clause | Stops a departing employee from actively trying to poach your existing clients or other staff members for a set period. |
| Company Property Rules | Clarifies that laptops, company vehicles, and mobile phones must be returned immediately upon the end of their employment. |
How Much Does it Cost in New Brunswick?
Drafting an employment contract does require a financial commitment upfront, but it prevents massive litigation costs later on:
- Custom Drafting by a Lawyer: A skilled employment lawyer in New Brunswick will generally charge between $750 CAD and $1,500 CAD to draft a robust, standard contract template for your business.
- Reviewing an Existing Contract: If you wrote a draft yourself and just want a lawyer to review it, expect to pay around $300 CAD to $600 CAD.
- Cost of Getting it Wrong: If you use an invalid contract and get sued for wrongful dismissal, defending the claim in court can easily cost upwards of $10,000 CAD in legal fees.
How Long Does the Process Take?
Working with a law firm to create a tailored employment contract usually takes about 1 to 2 weeks. Once you have a finalized template, you can simply fill in the specific details (like name and salary) for each new hire, allowing you to onboard future employees almost instantly.
Frequently Asked Questions (FAQ)
Do employment contracts in New Brunswick have to be in French?
While New Brunswick is officially a bilingual province, private businesses generally have the freedom to operate and draft contracts in either English or French. However, it is a best practice to provide the contract in the employee’s preferred language to ensure they fully understand what they are signing.
Can I put a strict non-compete clause in the contract?
Non-compete clauses are heavily scrutinized by Canadian courts. To be legally enforceable, the restriction must be completely reasonable in its time limit (e.g., 6 months) and geographic scope (e.g., within Saint John). Broad clauses that ban someone from working in their industry across all of Canada are almost always thrown out.
What happens if an employee refuses to sign?
If a new candidate refuses to sign your employment agreement, you simply should not hire them. If you want an existing employee to sign a brand new contract, you generally must offer them “consideration” (like a signing bonus or a pay raise) to make the new terms legally binding.
Does the contract override the Employment Standards Act?
No. You can never legally contract out of the minimum standards set by the government. If your contract attempts to give someone less vacation pay or shorter notice than the Act requires, that specific clause is entirely void, and the law will take its place.
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