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Laura Williams, a Toronto labour and employment lawyer at Williams HR Law Professional Corporation, offers advice on setting up an employee agreement and how to terminate an employee. Photography by Amanda Lowe for The Globe and Mail.

Many small business owners are so caught up in running the business, that by the time they recognize that they need to hire someone for a particular role, it's too late, says Laura Williams, a Toronto labour and employment lawyer at Williams HR Law Professional Corporation.Amanda Lowe/The Globe and Mail

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“Often times what happens is the need to hire someone becomes so desperate and the employer wants to present an attractive [job] offer,” Ms. Williams says in Marjo Johne's article 'The right way, and the wrong way, to fire someone.' “So they’ll detail the conditions of employment but won’t include the terms of termination.”Amanda Lowe/The Globe and Mail

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To minimize risks from terminating an employee, small businesses need to have proper human resource documents and processes in place, she says.Amanda Lowe/The Globe and Mail

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Small business owners should also be proactive in creating an employment agreement - something Ms. Williams says many small business owners overlook.

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Because small businesses usually operate without an HR department or specialist, they may lack an in-depth knowledge of employment standards, which are set and enforced at the provincial level she says.

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This lack of knowledge can get them into trouble when it comes time to part ways with an employee, Ms. Williams says.

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Ensure that anyone conducting the termination of an employee has been trained, and conducts the meeting in a manner that accords the employee with a fair measure of dignity.

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A common misconception pertains to the notice period to which terminated employees are entitled. Provincial employment standards specify minimum requirements based on how long an employee has worked for a company, but the courts could decide that a longer notice period – or wages equivalent to this extended period – is warranted.Amanda Lowe/The Globe and Mail

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Ms. Williams has also seen some small businesses render their employment agreements invalid by throwing in overly broad or unreasonable post-termination demands, such as those that prevent a former employee from working in the same market, or even in the same country.Amanda Lowe/The Globe and Mail

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“A lot of employers say, ‘You can’t work in this industry in Canada for 24 months,’” she says. “But case law has been clear on this, and it’s rare that you can restrict an employee through a non-compete agreement unless it’s a key employee with fiduciary duties.”

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