Types of Employment Contracts in Canada

There is only one type of employment contract in Canada, the standard employment contract. Still, the terms and conditions within that standard employment contract can vary depending on the specific nature of the job and the relationship between the employer and employee. In that sense, six key characteristics of an employment contract can be thought of as variations or subcategories or "types" within the broader category of employment contracts:

1. Full-time employment contract
2. Part-time employment contract
3. Fixed-term employment contract
4. Casual employment contract
5. Seasonal employment contract
6. Temporary employment contract

This blog post will delve into the different "types" of employment contracts in Canada and discuss their key characteristics.

1. Full-Time vs. Part-Time Employment Contracts

A significant distinction in employment contracts is whether the position is full-time or part-time. Full-time employees typically work a standard number of weekly hours (usually 37.5 to 40). Part-time employees, on the other hand, work less than the standard full-time hours per week. Their entitlement to benefits may vary depending on the employer's policies. 

2. Fixed-Term vs Indefinite Duration Employment Contracts

Another important aspect of employment contracts is the duration. On the one hand, fixed-term contracts have a specific end date, such as six months or one year, and are typically used for project-based work or temporary coverage (e.g., maternity leave). The employment contract terminates at the end of the agreed-upon period unless it is renewed or extended. Employers must ensure to include an early termination clause in these types of employment contracts; otherwise, if they hire a bad employee, they could be on the hook for the balance of the contract. 

In contrast, indefinite-duration contracts are ongoing until either party terminates the agreement. This type of contract is the most common in Canada. Employers should ensure that the terms of termination, including notice periods (i.e. severance pay) are clearly outlined in this type of employment contract at the very least.

3. Casual Employment Contracts

Casual employment contracts are designed for employees who work as needed without a set schedule or guaranteed hours. These employees may be called upon to fill in for full-time or part-time staff who are absent or during periods of increased workload. The terms of casual employment, such as pay rates and the process for requesting and assigning work, should be outlined in the employment contract (or have the employment contract refer to a policy about the same).

4. Seasonal Employment Contracts

Seasonal employment contracts cater to jobs available during specific seasons, such as holiday retail or summer tourism. Seasonal employees are usually hired for a set period and may return each year during the relevant season. In the case of seasonal employment contracts, employers should, among other things, specify the contract's duration, the work's nature, and termination considerations. 

5. Temporary Employment Contracts

Temporary employment contracts are similar to fixed-term contracts but are generally shorter in duration, often lasting a week to a month. These contracts are used for short-term projects or to cover short-term employee absences. The specific terms of temporary employment, such as the start and end dates and the scope of work, should be detailed in the contract, as well as, as always, any early termination considerations. 

Independent Contractor Agreements are not Employment Contracts

Did you come to this blog post looking to see if an independent contractor agreement is a type of employment contract? It is not. Independent contractors, by their very nature, are not employees, although we understand many, many employers make that costly mistake.

General Contents of an Employment Contract

Regardless of the "type" of employment contract, many employers choose to include several standard clauses, such as a termination clause and a probationary clause. 

A termination clause outlines the employee's rights upon termination of the employment contract (particularly concerning notice).

A probationary clause, usually lasting as long as minimum employment standards permit, allows the employer to assess the employee's performance before deciding whether to continue the employment relationship. Probationary periods in employment contracts allow the employer to terminate an employee in the probationary period without notice. 

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