On October 13, 2016, the Supreme Court of Canada refused to
consider an appeal of an Ontario Court of Appeal decision. This
decision is a useful reminder for employers about the care that
needs to be taken with fixed term employment agreements.
An employee signed a five year fixed term agreement provided by
the employer. The employee was dismissed, without cause, 23 months
later. The employee then sued, claiming an entitlement to the
remainder of the five year term.
The employer argued a provision in the agreement, which
Employment may be terminated at any time by the Employer
and any amounts paid to the Employee shall be in accordance with
the Employment Standards Act of Ontario.
Required only that termination pay be equal to the minimum
standards in the legislation. The trial judge disagreed and ruled
this provision was unenforceable because it was ambiguous, which is
consistent with a decision of the Alberta Court of Appeal a few
years ago which considered a contractual provision which said
"you will be entitled to advance notice or severance pay
thereof in accordance with the Employment Standards Act of
Alberta." That determination was not appealed and the trial
judge also ruled that the employee was entitled to common law
The employee appealed and the Ontario Court of Appeal found that
because the employee was hired under a fixed term agreement, the
employee was entitled to more than common law notice, and he was
entitled to be paid for the remainder of the five year term of the
agreement. The appeal court also found that the employee was not
required to take steps to mitigate these damages. The Supreme Court
of Canada, by refusing to hear the appeal, approved this
The principles applied by the Supreme Court are not new.
However, this case is a useful reminder to all employers about the
care that needs to be taken in drafting employment agreements.
Employment agreements, and especially employment agreements for a
definite term, must include clear and unambiguous termination
provisions. The consequences of not doing so, as this case shows,
can be very expensive.
We encourage all employers to have their employment agreements
reviewed before they are signed. Circumstances like this
demonstrate that an ounce of prevention is worth – and a lot
less expensive – than a pound of cure.
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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The arbitrator's decision covered a number of issues including whether the termination was appropriate and whether the City had breached the grievor's human rights. The following, however, will focus on the privacy issue raised.
In my December 15, 2016 article, Federal Government's Cannabis Report: What does it mean for employers?, I noted the Report's1 suggestion that there was a lack of research to reliably determine when individuals are impaired by cannabis.
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