Tag: contract


5 Impacts of the Amendments to the Employment and Labor Law in Canada

After much speculations, Kathleen Wynne’s government put forth a new set of reforms titled “Bill 148” or “Fair Workplaces, Better Jobs Act, 2017” related to labor law including overtime, sick pay, and how workers join unions and employers responsibilities to contract workers. The Changing Workplaces Review suggested significant changes and upgrades to the existing labor laws including the Labor Relations Act, 1995 (LRA), Employment Standards Act, 2000 (ESA), and the Occupational Health and Safety Act (OHSA). SE_Demo2Amended largely in favor of the employees and contract workers, the amendments to the labor law is expected to increase operating costs for businesses across Canada by some $23 billion over the next two years.

Rise in Labor Costs

One of the major amendment made along this labor law is the changes to minimum wage which is about to be set at $14 per hour effective from Jan 2018 increasing up to $15 per hour by Jan 2019. This 7% increase in minimum wage will force companies to rethink their operational strategies and will urge them to optimize process inefficiencies and invest in automation. Additionally, employers will also raise the bar for their expectation for people earning more than $15 per hour which may not always be possible.

Paid Vacation

Another change coming into effect from Jan 2018 would be the provision for employees to take three weeks of paid vacation after serving five years for the same company. Such a change in the labor law will make many employees qualified for such leaves. This is expected to increase the overall costs for small businesses who run their business with a small workforce and finding a replacement can be troublesome.

Work Scheduling

The new scheduling rules in the labor law, effective from Jan 2019 gives employees the right to request schedule, location, or shift changes. It also provides employees the power to refuse shifts without the fear of reprisal. Additionally, employers should compensate three work hours worth of pay if their shift is canceled 48 hours prior to its scheduled start time. Such regulations severely limit employers ability to reschedule works and manage shifts as per business demand effectively. Since canceling shifts incurs a financial penalty, businesses would have to resort to other measures to reduce staffing to adjust for slow business.

Part-Time and Contract Employees

The proposed change to the labor law also requires companies to compensate part-time, temporary, and seasonal workers the same amount as the full-time employees when performing the same job. However, the rule only applies to basic wages. This will require businesses to define jobs rigorously to be able to differentiate between similar part-time and full-time roles. For instance, companies who increase pay for employees based on years of service may instead look to improve pay on the basis of hours worked.


Under the current scheme of changes, the new amendment requires employers to provide a minimum of 10 days of personal emergency leaves (PEL), with the first two days being paid leaves. The changes also take into account personal leave reason to include experiences or threat of domestic or sexual violence. Additionally, the family medical leave has also been increased from 8 weeks in 26 week period to 27 weeks in a 52 week period. The biggest of all changes come in the form which limits employers from requesting a sick note from employees for taking a PEL. All such changes require a thorough examination of the current reporting processes to ensure compliance.

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The Downside of Gig Economy

The ‘gig economy’ has been described with numerous names including collaborative economy, sharing economy, part-time jobs, on-demand economy, and uberization. The dynamic changes in the competitive landscape have urged businesses to reconsider their working model. As a result, companies are adopting various business models including outsourcing, nearshoring, and gig economy. Proponents of gig economy argue that it will enable more people to participate in labor market by providing flexible options. SE_Demo2Businesses can call upon such gig workers at the time of need and thereby improve the overall productivity by keeping costs under control. However, overreliance on gig workers to perform tasks may not always be a wise move.

Downside of Gig Economy

Dipping Productivity of Gig Workers

Self-employment may increase the levels of job satisfaction but the gig economy is making individuals financially vulnerable due to lack of employee benefits. Most of the employee in gig economy do not have an adequate medical cover, savings, or life insurance. Due to such financial insecurities, it is forcing people in the gig economy to take up multiple jobs. Juggling between multiple part-time jobs can hamper the productivity of the person which might result in sub-par works being performed for the companies.

Higher Taxes for Contracted Workers

Independent or self-employed workers are required to pay their own taxes including social security, federal withholding, and Medicare. To cover such taxes, contracted workers in the gig economy usually place a higher cost for their services. In the end, businesses will have to end up paying higher amounts to workers in the gig-economy thereby increasing the cost.

Government Regulations and Policies

In order to tackle the disadvantages of gig economy to the workers, government rolls out various regulations and policies that put pressure on companies to formalize their employment relationships. For instance, recently, a UK court ruled that Uber should treat their drivers as workers and take care of minimum wage, health insurance, and holiday pay. The company was previously able to save 30% of the cost to operate a fleet of 40,000 drivers, will now have to work out on their business model.

Apart from posing challenges for companies, gig economy also has severe consequences for the workers as they usually have to work more than 60 hours per week, without health insurance and financial stability. The stress arising out of such works can have serious effects on a workers health which further increases the healthcare costs.

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supply management

Five Terrible Mistakes you are Making with Contract Management

All business deals and projects are closed with complex contracts. The company enters into a contract with their partners, suppliers, vendors, customers, or employees. There may also be a time where multiple contracts exist with each party. With so many contracts in the table, it is necessary that a firm has deployed efficient contract management practices. Missing a small detail in the contract or overlooking a single clause in it can have devastating effects. Although the consequence of inefficient contract management can beSE_Demo2 damaging, organizations still make mistakes when it comes to contract management.

Mistakes You Make with Contract Management

#1 – Overreliance on Paper-Based System

Its already 2017, and there must be something wrong if any organization is relying primarily on papers for record keeping and carrying out transactions. In an era dominated by digital signatures, the blockchain, e-procurement, and electronic data interchange, relying on a paper-based system for contract seems outdated. Depending on the paper-based system could bring out problems such as discrepancies in two copies, risk of tampering, damage, theft, and forgery. By using contract management software, the process of drafting contract can be hastened with the availability of pre-approved templates. Additionally, contract automation can accelerate negotiation cycle, reduce erroneous payments, and cut operating and processing costs.

#2- Neglecting Document Access

Documents containing sensitive information is of critical importance to an organization. Granting full access to documents for all stakeholders may not be the wisest of ideas. It is important to limit the access to critical documents to only those who needs it. Additionally, contract management systems can grant different level of authority as required which can be restricted, read-only, or editing permissions. Also, giving write permissions to all stakeholders may bring out the classic case of “too many chefs spoil the broth” with numerous revisions. Some companies are looking at blockchain technology to implement contract management as it can ensure both privacy and transparency as required.

#3 – Failure to Engage all Related Stakeholders

Failure to engage all related stakeholders in the contract management process can be detrimental to the company. It usually happens in public sector contracts as numerous parties are affected by the contract. It might happen that once some parties are left out, it may later develop a conflict of interest, and hinder the smooth flow of operations. Modern-day contract management solutions allow the drafter to include all related parties in the drafting process. Simplified contact lists enable the drafter to double check if any concerned parties have been left out.

#4 – Storing Contract Documents on Multiple Shared Drives

Although companies are using digital packages to draft their contract, they can always make a blunder of sending out copies which will be saved on multiple drives. It not much of a problem if it is the finalized contract, but if revisions are to be made, then the person revising will have a different version compared to others whose drive has not been updated. This way, whenever a correction is made, each party can have modified version of the contract. The best way to avoid this pitfall is to opt for cloud-based online contract management software and allow central collaboration to edit the document.

#5 – Neglecting Auto-Renewed Contracts

It is not good to be too comfortable and neglect auto-renewed contracts. Although digital contracts can be auto-renewed with the use of contract automation, there might be some adjustments that can be missed. It can be possible that the company may allow outdated conditions to continue or continue longer than either party would like to without their knowledge.

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Why it’s Already Time to Shift Contract Management from Paper-based Processes to Software

Long gone are the days when deals used to get finalized over a phone approval or firm handshakes. Today, the procurement process is initiated only when the contract is awarded. The problem with traditional paperwork is with the amount of time it takes to prepare and execute, and then there’s always this fear of disputes arising out of the contract, which could hamper the supplier relationship. Constant pleas from organizations for a better contract management solution has given rise to the contract management software, which can replace traditional paperwork and increase procurement efficiency. Here are some of the reasons signaling why your organization needs a contract management software.SE_Demo2

Reduce Contract Cycle Times
Contract management software uses templates with pre-approved clauses and pre-defined approval work-flow, facilitating easy editing of contracts as per stakeholder inputs without compromising on accuracy. The software also provides full visibility into contracting processes and orchestrating the contracting process across its life cycle; thus, avoiding the chance of contract mismanagement.

Decrease Overall Risk Quotient
Organizations are constantly battling with multiple factors to reduce their overall risks. But many a time, risks arise out of poor contract management practices. Companies might fail to comply with the contract clause, miss a contract opportunity for discounts, spot errors in the contract, or fail to enforce negotiated supplier terms – all of which are financial, time, or compliance risks. A good contract management software can mitigate such risks by sending timely notifications to track contract expiry, allowing effective collaboration between stakeholders to reduce errors, and identifying profitable opportunities by providing dynamic reporting and configurable dashboards.

Improve Cost-Savings
For many organizations, maverick spends are managed outside the jurisdiction of contracts. The contract management software increases savings by bringing such maverick spends under contracts and increasing compliance. It also helps save costs by identifying revenue opportunities, decreasing administrative and operational costs, and improving client satisfaction.

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10 Tips for Better Contract Management

Finding and securing a supplier is an essential part of sourcing and procurement strategy, as is maintaining a strong relationship with them. However, a vital part of this relationship is often overlooked or not given enough attention: contract management.

Contract management is not simply about writing and signing contracts. That part of the process is important, but there are many more factors involved. An effective and efficient supplier relationship requires planning and forethought during the contract writing and signing, as well as continued attention throughout the duration of the contract. And when an organization has multiple contracts to manage — sometimes even hundreds — inefficiencies in the process add up quickly. It is therefore essential to budget time and resources for this area of the business.

Here are some tips for effective contract management:

Pay attention to wording: Even if both sides have the best intentions, unclear or improper wording can cause problems somewhere down the line. Poor wording can open your company to abuse, legal action, or simply confusion, making any conflicts more difficult to resolve.

Be specific: If you discuss something with your supplier, include it in the contract. Specify what needs to be done and when, but also include other details on the process and the relationship. If it is well documented, it is less likely to be forgotten, and you will have legal recourse if your supplier doesn’t deliver what you expected.

Be flexible, and build flexibility into the contract: Everything in a contract should be well defined, but that does not mean there is no room for flexibility. Needs and circumstances will change, and if the contract includes provisions for this, it will be easier and less costly to accommodate those changes.

Be willing to adjust terms: While writing flexibility into the contract is important, it still will not account for every eventuality. Sometimes changing terms is advantageous, or even necessary, in order to adapt to unexpected events.

Communicate: Check in on your partner’s progress, find out if there are any issues and whether the supplier is meeting your requirements. It is easier to detect and fix misunderstandings and other problems early in the process. Also let your partner know of any changes or problems on your end, as well as any other information that might help them better meet your needs. It is dangerous to assume that everything is going well just because you haven’t heard otherwise.

Maintain a good relationship: It is important not only to communicate, but to be on good terms with your supplier. If both parties are on good terms, it will be easier to work together, and you will both be more invested in the other’s success. It will also make your supplier more willing to accommodate changes or problems.

Use key performance indicators: Having objective ways to measure performance will make it easier to monitor progress and detect problems. These can be included in the contract itself in order to ensure that certain goals are met, and to have provisions in place if they are not.

Plan for problems: Make sure your contract has measures to deal with issues with your partner. Even if both parties start out (or seem to) on good terms, it is always possible for a relationship to go sour. You are not being rude to your partner by including these provisions, especially if the contract also provides recourse for them if you fail to uphold your end of things.

Be prepared for the end of the contract: Don’t let the contract’s expiration take you by surprise. Leave yourself plenty of time to either renegotiate or to find a new supplier.

Find a good software solution: Working with multiple suppliers means multiple documents to track and relationships to manage. This can be time-consuming and details can be easily lost. A good solution will streamline the contract creation process and help you keep track of essential and timely information. It will also save many hours of labor.

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