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Why is Employment Law important for Startups and Small Businesses?

Starting a business is a thrilling milestone, but managing the legal intricacies of employment law can be daunting. A well functioning team can be the determining factor for success, while a disfunctional work environment can often ruin great organizations. At TZ Law, we specialize in guiding startups and small businesses across Alberta and British Columbia through these critical challenges, ensuring compliance and risk mitigation every step of the way.

Employees vs. Independent Contractors?

The choice between hiring employees or engaging independent contractors is a fundamental decision for your business. Each has its benefits and legal implications:

Employees: Greater integration into your business but come with statutory responsibilities like severance pay in Alberta or BC and compliance with employment standards codes.
Independent Contractors: Reduced administrative obligations but heightened risk if misclassified. Courts often look beyond labels, applying tests like control, exclusivity, and financial independence.

Why It Matters: Misclassification can lead to unexpected liabilities, including wrongful dismissal claims or severance obligations.

Termination of Employment

Ending the employment relationship is one of the most challenging aspects of running a business. Here’s what you need to know:

Without Cause Termination: Requires adequate notice or severance pay, depending on the province. Employers are obligated to provide the dimissed employee with advanced notice according to the employment standards legislations in the province at a minimum.
For Cause: An extremely high legal bar to meet; it is essential to document performance issues thoroughly, and follow the principle of progressive discipline.
Releases: Obtaining a signed release from the employee minimizes the risk of future litigation.

Employees terminated without adequate notice or severance may bring wrongful dismissal claims. These claims often hinge on:

Whether the notice or pay in lieu was reasonable.
Compliance with provincial standards in Alberta and BC.

Why It Matters: Mishandling terminating can be detrimental to a business, creating unnecessary legal risks, lowering productivity, and hurting morale.

Crafting Robust, Compliant, and Up to Date Employment Agreements

We have seen countless employers recycle, or simply use an outdated or generic template. This creates considerable legal risks as even minute compliance can render an employment agreement invalid. A well-drafted employment agreement is the cornerstone of a sound employer-employee relationship. Key considerations include:

Clearly defining duties and termination clauses to mitigate risks of wrongful dismissal.
Addressing bonuses, commissions, and stock options.
Protecting your business through confidentiality and non-compete clauses.

Pro Tip: Employment agreements must be signed before the employee begins work to be enforceable.

Why Choose TZ Law?

Provincial Expertise: Deep knowledge of employment law in Alberta and BC, including severance pay, employment contracts, and termination procedures.
Tailored Solutions: Customized legal strategies to align with your business goals.
Preventive Measures: Proactive risk assessments and legal audits to safeguard your company from potential liabilities.

Whether you’re drafting your first employment agreement, navigating termination laws, or addressing a wrongful dismissal claim, TZ Law is here to help. Schedule a Consultation with our Employment Lawyer to ensure your business is set up for long-term success.

By addressing the full spectrum of employment law for startups and small businesses, TZ Law helps entrepreneurs like you focus on what matters most—growing your business.

Let us handle the legal complexities while you achieve your vision.