If you have a job, then, whether you know it or not, you have an employment contract! Let’s call it an employment agreement for ease. There are three different styles of employment agreements. They are all valid, so long as they clearly identify the key terms: the parties to the agreement, when it starts, what the job is, and what the compensation is.
The simplest kind of employment agreement is a verbal agreement – there is generally no requirement an employment agreement be in writing (except, possibly, fixed term agreements longer than a year). A verbal agreement can be as simple as a conversation where your employer asks, “Will you work for me as a clerk for a salary of $48,000 per year, starting next Monday?” and you reply, “Yes, I will.” You may verbally negotiate further details like vacation allotment, hours of work, place of work etc. These are perfectly valid and binding; any unspecified terms will be governed either by relevant Employment Standards legislation or by common law decisions by prior judges on similar matters.
The most complex kind of employment agreement is a formal written contract with headings, a preamble, and a number of specified terms. These contracts are often signed by both sides, and contain core terms like job duties, compensation, vacation allotment, hours of work, and place of work; they may also include terms about termination pay, work place policies, confidentiality provisions, non-disclosure agreements, non-competition clauses, etc. You should always have a lawyer review a written employment contract to identify where your common law rights may be affected by the contractual language.
The third, and very common, kind of employment agreement is a written letter agreement. As one would infer, a letter agreement is a letter from the employer to you which sets out the fundamental terms of the agreement. The employer may expect you to sign it to acknowledge agreement; however, if you don’t sign it but show up for work, you may be deemed to have accepted it. At a minimum, the letter agreement will detail the job duties and the compensation; it may also include some of the matters covered in formal employment contracts, especially termination provisions, and it will probably incorporate the business’s policies into the agreement. Like a formal written contract, you should always have a lawyer review the letter agreement.