By now we all know that Courts are reluctant to enforce
provisions in employment contracts that seek to limit the amount of
termination notice provided to employees. A recent British Columbia
Supreme Court decision serves as a stark reminder for employers of
the lengths to which Courts will go to avoid restricting the notice
entitlements of employees.
In DeGagne v. Williams Lake (City), Donald
DeGagne entered into an employment agreement with the City of
Williams Lake. The agreement provided for a six-month probation
period and one month's notice of termination should DeGagne
have been terminated within the probation period:
The Probationary Period will be six (6) months... The
City may terminate the Employee's employment without just cause
by... providing the Employee 1 month written notice of
termination if the employment is terminated during the 6 month
probationary period [or by] providing the Employee 6
months' written notice of termination if the employment is
terminated during the first year of this Agreement... [Emphasis
According to the agreement, DeGagne was to start his employment
on March 1, 2013. However, in unusual fashion, DeGagne was
dismissed on February 27, 2013, subsequent to the agreement's
execution but prior to the commencement of his employment.
Relying on the terms of the agreement, the City provided DeGagne
with one month's salary in lieu of notice of termination. In
response, DeGagne brought a Claim for wrongful dismissal against
the City based on, among other things, his notice entitlement.
At trial, the City took the seemingly reasonable position that
because DeGagne had agreed to a one-month notice period during the
probationary period he could not reasonably have anticipated that
he would be entitled to a greater severance payment if the
employment contract was terminated before he commenced his
The Court rejected the City's argument, declining to take
into consideration the intentions of the parties. Instead, it based
its decision on the "plain and ordinary meaning of the
words" in the agreement. On that basis, the Court determined
that since DeGagne had not yet started to perform his employment
duties, he never embarked on any probationary period. Accordingly,
the one month termination notice clause in the Agreement addressing
the probationary period did not apply.
The Court awarded DeGagne 6 months' notice based on both the
language in the agreement and as a result of Mr. DeGagne's 57
years of age and 25 years of prior experience in his field.
Take home for employers:
Most employment agreements do not expressly consider the
specific period of time after an employee is hired but before her
or his first day of work. Although this decision was guided in
large part by the specific termination language, employers should
consider additional notice language in the employment agreement
that contemplates a scenario where the employee does not commence
Importantly, employers should ensure all employee terminations
are reviewed with an experienced employment lawyer and employment
agreement templates are revised regularly.
The lawyers at CCPartners are well versed in navigating employee
terminations as well as drafting and revising employment agreements
including termination provisions that will withstand judicial
scrutiny and reduce exposure for employers.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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