A recent decision of the Ontario courts has thrown employers another frosty glance that shouldn't be ignored
The court of law can be a fickle companion; at times friendly and at other times a foe.
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Employers would surely agree with that statement despite experiencing less of the former for the better part of a decade.
A recent decision of the Ontario courts has thrown employers another frosty glance that shouldn’t be ignored.
Karen Dufault was a youth engagement coordinator for the Township of Ignace – northwest of Thunder Bay – earning $75,000 a year, plus benefits, and she participated in the pension plan.
She started working for the Township in October 2021. In November 2022, she signed a fixed-term agreement when it was agreed that her employment would continue for a fixed period, ending Dec. 31, 2024.
Despite the new contract being signed in November 2022, Dufault was terminated without cause in January 2023. She was paid only two weeks on termination, consistent with the termination provision in the employment agreement she signed.
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Dufault sued for wrongful dismissal damages claiming the 101 weeks that remained on her fixed-term contract at the time of her dismissal.
At a summary judgement motion the court dissected the termination provision in her employment agreement finding a laundry list of reasons as to why it was unenforceable.
The story gets interesting here because the court recognized a new reason for striking down standard termination provisions. The court found that when the Township purported to have “sole discretion” to terminate Dufault’s employment “at any time” it violated employment legislation as it prohibits employers from terminating employees in certain circumstances.
This findings is groundbreaking as most employers have the customary line in their employment agreements that stipulates they can let an employee go at their discretion or “at any time.”
But the court here pointed out employers can’t terminate employees at any time, in particular if employees are on protected leaves from the workplace which require employers to return those workers to their previous jobs when the leave ends.
Essentially, the right for an employer to terminate an employee is not absolute and a contract cannot vest an employer with this “right” it, in fact, does not enjoy under our laws.
Dufault was awarded $157,071.57 on her motion (plus costs), a far cry from the two weeks pay the Township thought it had to pay her per the contract she signed.
The lesson here for employers? Consider reviewing your contracts and moving your termination provisions away from paying employees employment standard act minimums. The law continues to evolve and the courts seem less inclined to uphold such contracts. Do what you can now, to avoid the court’s cold shoulder.
Have a workplace question? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.
The content of this article is general information only and is not legal advice.
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CHAUDHRI: Employment contracts under scrutiny yet again
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02.03.2024
A recent decision of the Ontario courts has thrown employers another frosty glance that shouldn't be ignored
The court of law can be a fickle companion; at times friendly and at other times a foe.
Subscribe now to read the latest news in your city and across Canada.
Subscribe now to read the latest news in your city and across Canada.
Create an account or sign in to continue with your reading experience.
Employers would surely agree with that statement despite experiencing less of the former for the better part of a decade.
A recent decision of the Ontario courts has thrown employers another frosty glance that shouldn’t be ignored.
Karen Dufault was a youth engagement coordinator for the Township of Ignace – northwest of Thunder Bay – earning $75,000 a year, plus benefits, and she participated in the pension plan.
She started working for the Township in October 2021. In November 2022, she signed a fixed-term agreement when it was agreed that her employment would continue for a fixed period, ending Dec. 31, 2024.
Despite........
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