Employment Offer Letter

An offer letter is a simple employment agreement which sets out the important details of a job. It is generally used in situations where a more detailed contract is not necessary.

These are some of the important elements that are included in an employee offer letter:

• job title and description
• working hours and location
• the term of employment, such as a fixed 1-year term or indefinite term
• compensation and entitlement to any benefits
• conditions of employment, such as satisfactory background checks
• simple confidentiality and intellectual property provisions
• notice that must be provided on termination

It is the last item, the notice that must be provided on termination, which is arguably the most important provision included in an employment contract. The reason is that where an employer wishes to terminate an employee, the employer must give them notice or pay in lieu of notice (except in certain cases of wilful misconduct, disobedience or wilful neglect where an employee can be terminated without notice). Under the common law, the amount of notice varies depending on the circumstances but could be about 1 month per year of service up to a maximum of about 2 years. An offer letter can limit the amount of notice to the minimum notice required under the Employment Standards Act, 2000 (Ontario) which is approximately 1 week per year to a maximum of 8 weeks. In order for this to be effective, the termination provisions of the offer letter will need to be consistent with the provisions of the Employment Standards Act, 2000 (Ontario) (this is a common area of litigation between employers and terminated employees where there is an employment contract).

For high-level employees or employees working with important confidential information, customers or intellectual property, a comprehensive employment agreement, rather than an offer letter, may be more appropriate.