Employment Contracts in BC: What Small Businesses Get Wrong

How to make sure your contracts actually protect your business.

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Across BC, employers are relying on outdated templates, generic language, or agreements that don’t meet legal requirements.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.

Employment Contracts in BC: Common Mistakes to Avoid

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.

Fix it: Ensure termination language clearly meets BC employment standards and is reviewed regularly.

Small wording issues can have major consequences. If you need a detailed review of your current template, Senterra HR can help.

2. Using Generic or Outdated Templates

Many contracts are copied from:

• old company templates

• online sources

• other businesses

The problem is they often:

• don’t reflect your business

• don’t match the role

• don’t align with current legal standards

Fix it: Use contracts that are tailored to your business and updated to reflect current requirements.

A contract should reflect how your workplace actually operates.

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

• job responsibilities

When expectations aren’t clear, issues show up later.

Fix it: Be specific.

Clear contracts reduce confusion and make expectations easier to manage.

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.

Fix it: Ensure contracts are signed and in place before the first day of work.

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.

Fix it: Before updating an employment contract, ensure the changes are properly structured and supported.

This may include providing additional compensation, a bonus, or another form of consideration.

Don’t assume a new agreement will automatically replace the old one.

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.

This can create risk, particularly when it comes to termination obligations.

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.

Fix it: Ensure temporary or fixed-term contracts are clearly written, with defined start and end dates and no ambiguity around the nature of the role.

Avoid repeatedly extending temporary agreements without reviewing the structure—this can undermine the original intent.

 

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.

Need Support?

Senterra HR helps BC businesses develop clear, practical employment contracts that reflect real workplace expectations—and hold up when it matters, helping you reduce risk and avoid costly termination outcomes.