Do you need a Tenure Policy?
by Maria Ricci
I have a strong belief that whether you are a small, medium size or large corporation, a tenure policy will definitely be one of great benefit to you. Although it is not obligatory for an enterprise to have one, it plays an important role in the proper management of your 
independent contractor community, it is a highly contributing factor toward the mitigation of co-employment risk and it also promotes cost saving opportunities.
The benefits are not easily acquired. Here are some items to consider when establishing the tenure policy:
- Establish a limit that coincides with the recommended time line present in your labor law standards based on your province or state of business.
- Ensure that the proper resources are in place to monitor-audit the policy.
- Select a vendor management tool that will assist with the quality control of the established policy.
- Seek legal advice to ensure validity and protection of the established policy.
- Create a clear “exception” process because there will be some.
Benefits of voting “Yea” for :
- Will reduce the risk of an independent contractor claiming employee status due to length of service.
- The obligation to recruit for new talent in order to comply with the established tenure will assist the corporation in obtaining a more contemporary workforce.
- All of the above will assist the corporation in achieving their cost saving objectives. This will occur with the acquisition of new talent through positive turnover. Through attracting a contemporary workforce wanting to share their gained experience versus being paid top dollar for the experience they have gained through the years working for the same corporation.
- Decreases the financial risks of a negative legal ruling.
Risks of voting, “Nay”:
- Will increase the risk of having to offer a permanent position to an independent contractor due to length of service.
- Will increase the risk of having to incur unnecessary legal fees to debate the hiring of an independent contractor due to length of service.
- Will increase the risk of not engaging the best talent to get the job done.
- Will increase the risk of paying out of market rates in trying to retain a contractor who has already been there past ideal tenure.
I vote Yea!!
TRUE STORY: A client of ours terminated a contractor who had been with the company for 15 years. Yes, 15 years. The contractor sued the corporation for back severance for the 15 years and other fringe benefits not received. While not yet through the court system yet, the ruling which will most likely be in favor of the employee will be approximately $1.2MM in severance, benefits and taxes.
Please share your thoughts…….