Offer Letters & Employment Agreements

Who this guide is for

Founders writing their first offer letter — and wanting to understand what the words actually do before they send it.

An offer letter feels like a formality. It isn't: it's the document that decides how much an exit costs you, and a few careless lines can hand an employee far more on termination than you ever intended. This guide is current as of 2026 and uses B.C. as the worked example; employment law is largely provincial and judge-made, changes often, and turns on specific facts, so treat this as orientation, not a substitute for advice on your actual contract.

Is a written offer letter legally required?

Strictly, no: for most provincially regulated employees, a verbal employment agreement is legally binding. But that's exactly why you want it in writing. Without a written contract, the terms are whatever a court infers from conduct, your policies, and the statutory minimums, and crucially, you lose the ability to limit common-law notice. The default, in the absence of a valid termination clause, is the generous common-law amount, not the modest statutory one.

So the honest framing of "must": you're not legally compelled to issue a written offer, but it's the only practical way to set clear terms and cap your termination exposure. That alone makes it worth doing properly.

What a solid offer letter covers

At minimum, put these in writing:

The paragraph that decides everything

Here's the mechanism. On a without-cause dismissal, the law presumes the employee is owed common-law reasonable notice — assessed on age, length of service, the nature of the role, and how easily they'll find comparable work, and running as high as roughly 24 months for long-service or senior people. A termination clause can rebut that presumption and limit the entitlement to the statutory minimum (in B.C., one week after three months, up to a maximum of eight weeks). That's the gap the clause controls.

There's also live uncertainty over phrasing like terminating "at any time": some recent decisions have struck clauses for it (because it could imply dismissal during a protected leave), others have upheld them. The doctrine is mostly Ontario-developed, but the underlying principle — a clause that dips below the statutory floor is void — applies everywhere. The practical conclusion is the same: this is not a paragraph to write yourself or lift from a template.

Why the timing is do-or-die

A contract needs consideration — each side must give something. When you hire someone, the job itself is the consideration. But once they've started, continued employment is not consideration for new terms. So if you spring a contract (or a termination clause) on someone after they've begun, without giving them something new — a signing bonus, a raise, a promotion — the new terms can be unenforceable, and you're back to common-law notice.

• The clean path: present the full written agreement, let the person review it, and have them accept all the terms before their first day.
• The nuance: signing a day or two after starting isn't automatically fatal if all the terms were genuinely agreed beforehand (say, set out in the offer email) and the signing was just administrative. The danger is introducing new terms after the start.
• Don't use a threat as leverage. Telling an existing employee "sign this or you're terminated" without offering proper severance can make the signed contract unenforceable. Fresh consideration has to be a genuine new benefit.

Canada is not "at will" — and US templates are dangerous

This trips up founders who've worked in or borrowed from the United States: Canada has no "at-will" employment. You can end employment without cause, but you must provide notice or pay in lieu: statutory and, absent a valid clause, common-law. Only true "just cause" (a high, fact-specific bar) allows dismissal without notice.

So a US offer-letter template — with "at-will" language, or governed by a US state's law, disentitling the employee to Canadian minimum standards — is worse than useless here: courts treat such terms as unenforceable, which can collapse your termination protections and leave you exposed to full common-law notice. Start from a Canadian, province-appropriate agreement, not a US one.

Restrictive covenants: what actually holds

Founders often want a non-compete. Be realistic about what's enforceable:

• Non-competes. Ontario has banned them in employment for most employees (since October 25, 2021), so they're generally void there. Elsewhere — including B.C. — they aren't banned but are presumed unenforceable at common law unless narrowly reasonable in time, geography, and scope, and protecting a legitimate proprietary interest. Courts dislike them. (A federal ban for federally regulated employers was proposed in Budget 2025, with consultations underway.) Non-competes tied to the sale of a business remain enforceable.
• Non-solicitation and confidentiality clauses are the tools that actually hold. A reasonable non-solicit (not poaching your clients or staff for a defined period) and a solid confidentiality and IP-assignment clause protect your real interests far more reliably than a non-compete a court won't enforce.

What a probation clause does — and doesn't

A probationary period lets you assess fit early, but it can't strip away statutory rights. In B.C., there's no statutory notice obligation in the first three months, so a probation clause typically aligns with that window, but a clause purporting to remove protections an employee is legally entitled to won't be enforceable. Even during probation, the assessment should be conducted fairly and in good faith.

Conditional offers

If your offer depends on something, say so in writing and make it a clear condition: satisfactory references, a background check where appropriate, or proof of eligibility to work in Canada (especially relevant if the candidate holds a permit; see the immigrant-founder guide for how status interacts with work). A conditional offer, properly worded, lets you withdraw cleanly if a condition isn't met.

When to get help

This is the one to not DIY. Have an employment lawyer draft a template offer letter and employment agreement for your province — once. It's a modest, one-time cost, and a reusable, enforceable template (with a sound termination clause and the right restrictive covenants) is the cheapest insurance you'll buy as an employer. After that, you can reuse it for each hire, returning to the lawyer for senior or unusual roles.

If you're in British Columbia

• Statutory notice in B.C. runs from one week after three months of service to a maximum of eight weeks after eight years: that's the floor an enforceable termination clause can hold an employee to.
• B.C. has not banned non-competes the way Ontario has, but B.C. courts still treat them as presumptively unenforceable unless genuinely reasonable — so don't rely on one.
• The termination-clause case law is mostly from Ontario, and it's not certain B.C. courts apply every aspect identically — but the safe approach is the same everywhere: draft to clearly meet the B.C. statutory minimum and have it reviewed.

Checked June 2026. Employment law evolves through new cases — confirm current rules with B.C. Employment Standards and an employment lawyer.

Common mistakes to avoid

Official sources

Statutory minimums come from legislation; the enforceability rules come from case law. Both matter — and a lawyer should review your actual clause.