March 2022 - Stacey R. Ball

Alberta Court Upholds 4 Week Termination Clause

by Stacey R. Ball| March 9, 2022August 13, 2023 | General

In Lawton v Syndicated Services Inc., the Alberta Provincial Court upheld a termination clause in an employment contract that limited an employee’s notice period to just four weeks.

The Facts

Mr. Lawton was a former employee of Syndicated Services Inc. He commenced employment in August of 2018 as the Chief Operating Officer making a salary of $158,000 per year. Importantly, Mr. Lawton negotiated a term into his employment contract that required four weeks’ notice in the event his employment with Syndicated was terminated.

In 2020, the business was suffering dramatically. There had been a significant drop in the industry in which they operated. The sudden impact of the COVID-19 pandemic was, as described by the trial judge, “the nail in the coffin.” The company experienced a loss of $200,000 in 2020. In response, Mr. Lawton was terminated at the end of April 2020 having only worked with the company for approximately twenty months.

In the proceeding before the court, Mr. Lawton was claiming against his former employer $64,583.84 in severance pay (being approximately 21 weeks’ notice – far more than the 4 weeks agreed to under the contract), $15,000 in benefits, and $10,000 in enhanced damages.

Was Mr. Lawton Entitled to More Notice?

In determining how much notice Mr. Lawton was entitled to, the trial judge noted that after only 20 months’ service, he would be entitled to only one week of notice under the Alberta Employment Standards Code. Nevertheless, the parties agreed to a term permitting four weeks’ notice under the employment contract. The contract, in Mr. Lawton’s particular circumstances, consequently provided for a benefit that was greater than the minimum entitlements of the Employment Standards Code. In commenting on that term, the trial judge stated:

“The employment contract had the term “Termination of this contract requires 4 weeks notice”. This term is clear and unambiguous. Parties are entitled to negotiate terms of employment contracts and where the terms do not interfere with statutory requirements they ought to be enforced.”

As a result, Mr. Lawton’s claim for increased severance pay was dismissed as he was paid exactly what he was entitled to under his contract.

The Takeaway: Distinctions in Alberta vs Ontario Law

This case is interesting in that the result departs from what might be expected under Ontario law. The four week termination provision was not contrary to law here because it provided a benefit greater than the statutory minimum. However, this was only the case because Mr. Lawton’s tenure with the company was so short. Had he been working there longer, Mr. Lawton may have been entitled to more according to the statutory minimum than he was contractually entitled to receive under the employment contract. In a hypothetical context where Mr. Lawton may be entitled to, for example, six weeks’ notice under statute, it would be impossible for the contractual term of only four weeks’ notice to be enforceable.

What this suggests is that in Alberta, courts are willing to interpret employment contracts and their unique termination provisions based on the particular circumstances of the case and not on whether the impugned termination clause might violate minimum employment standards in a different context. This is very different from employment law in Ontario, where the fact that a contract could violate the Employment Standards Act may be enough to invalidate the contract’s terms, whether or not it results in any actual violation of the Employment Standards Act.

Terminating Probationary Employees: Canada (AG) v Alexis

This decision concerns the termination of a public sector employee and the interplay between two pieces of legislation: the Federal Public Sector Labour Relations Act and the Public Service Employment Act. The legal principles discussed herein may not be relevant outside the context of a public sector employee. However, the legal principles and tests may be similar to those applied by labour arbitrators in the private sectors.

Facts

In June of 2015, Ms. Victoria Alexis was terminated from her position with the Royal Canadian Mounted Police after approximately six months of work. Her problem, however, was that she was subject to a twelve-month probationary period. This did not stop Ms. Alexis from grieving her termination all the way to the Public Service Labour Relations and Employment Board (the “Board”). The question for the Board was whether the employer established a valid employment-related reason for rejecting an employee on probation, and also whether the employee is able to demonstrate that the termination was actually effected not for an employment-related reason but rather for “some other contrived reason or that it was disguised discipline, a sham, a camouflage, or in bad faith”.

Ultimately, the Board sided with Ms. Alexis. They found her termination was made in bad faith, and that her termination was for reasons that were illegitimate and not employment-related. She was consequently reinstated to her position and awarded compensation for lost wages and benefits.

At the Federal Court of Appeal

The Attorney General of Canada appealed the Board’s decision to the Federal Court of Appeal. In their view, the Board applied the wrong legal test. The Federal Court of Appeal held otherwise:

“Contrary to what the Attorney General submits, a review of the adjudicator’s decision in its entirety demonstrates that the adjudicator in fact followed and applied the accepted test for reviewing an employer’s decision to release an employee during the probationary period.”

The Attorney General argued that the Board did not have jurisdiction to hear termination grievances from probationary employees. It seems this is generally true, but not where the termination of an employee on probation is a “camouflage, shame or made in bad faith.” Case law suggests that the Board can intervene in those circumstances. Furthermore, it is well known that the burden rests on the employee to establish that the termination was a camouflage, sham or conducted in bad faith.

The Federal Court of Appeal ultimately decided that the Board did not stray away from the accepted legal test. The Board properly considered the evidence in drawing their conclusion that the employer acted in bad faith. The particular evidence included:

the employer had not provided the respondent mentoring and that its assertion to have done so was disingenuous (at para. 238);
the employer had not provided the respondent with training (at paras. 232 and 243);
the employer had provided the respondent with only five working days to improve her performance after being warned it was unsatisfactory (at paras. 224 and 229); and
the individual who made the decision to terminate the respondent and signed the termination letter had no knowledge of the respondent’s alleged failure to improve after the date she signed the termination letter, despite her intention that the respondent should have been given an opportunity to improve before being terminated (at paras. 226-230).

In the Federal Court of Appeal’s opinion, the above factors were sufficient to enable the Board to make their finding of bad faith. Where a release of an employee on probation is a sham, camouflage or made in bad faith, it is not a valid release on probation (which would be outside the Board’s jurisdiction) but instead is a termination which the Board may remedy pursuant to the Federal Public Sector Labour Relations Act.

The Attorney General’s action was consequently dismissed.

COVID-19 Vaccine Policies: Failure by Employee to Accept Reasonable Alternative

by Stacey R. Ball| March 7, 2022August 13, 2023 | General

We have encountered a great deal of arbitration decisions relating to COVID-19 vaccination in the early days of 2022. Most of these decisions, to the dismay of non-vaccinated Canadians, uphold mandatory vaccination workplace policies and the associated discipline for failing to comply – even to the point of outright termination of employment without cause. This is the case even where the policy provides for no alternative to vaccination.

Given the above, it is not so surprising that Arbitrator Stout, in a recent decision, upheld a mandatory vaccination workplace policy that did provide a reasonable alternative.

Hydro One’s COVID-19 Vaccination Policy (the “Policy)”

In this case, the employer Hydro One implemented a policy requiring all their employees to provide proof of vaccination status or confirmation of a medical exemption, or alternatively that the employee declined to disclose their vaccination status. Employees who either declined to disclose their vaccination status or remained unvaccinated pursuant to a medical exemption were provided an alternative: they were to undergo regular COVID-19 rapid antigen testing (RAT) prior to coming in for work. This is a much more accommodating policy than those that enabled employers to terminate unvaccinated employees without first offering them an alternative.

Nevertheless, a number of Hydro One employees refused to provide proof of vaccination and also refused to provide a negative RAT. They were consequently in violation of the Policy and placed on an unpaid leave of absence.

In addressing the situation, Arbitrator Stout began by commenting on the legitimacy of the Policy itself:

“I begin by noting that the Policy is reasonable, and it is necessary to address the on-going health and safety issues arising from the current COVID-19 global pandemic.”

This is consistent with earlier arbitration decisions regarding COVID-19 vaccinations, which all seem to emphasize the vital importance and necessity of being vaccinated in light of the global pandemic.

Ultimately, Arbitrator Stout held that it was reasonable for Hydro One to suspend workers who refused to comply with the Policy, either by not being vaccinated or by refusing to comply with regular testing. He wrote:

“I am also of the view that prohibiting employees from attending work if they do not provide proof of vaccination or a negative COVID-19 RAT is fair and reasonable in the circumstances of this pandemic. Hydro One is complying with their obligations under the Occupational Health & Safety Act, to take reasonable precautions to protect the health and safety of their employees and the public that they serve. The Policy is a reasonable compromise that respects employee rights and balances the various important interests.”

Perhaps the Policy “respects employee rights” by providing them with the reasonable alternative to vaccination. As it relates to failure to comply with the reasonable alternative, the RAT, Arbitrator Stout wrote:

“In terms of accommodating the Grievors with remote work, I agree with Hydro One that such an accommodation is not necessary or required in these circumstances. Most of the Grievors could not perform their work remotely in any event. It is also not necessary to provide remote work where a reasonable alternative has already been provided to those employees who refuse to disclose their vaccinated status (i.e., RAT). If employees refuse the reasonable alternative, then that is their free choice but Hydro One has no further obligation to accommodate such individuals.”

It would appear that where an employer has implemented a COVID-19 Policy and has provided within a reasonable alternative to vaccination, considering the circumstances of their workplace (i.e., is remote work necessary?), then the employer has already met their obligations and the failure of an employee to accept the reasonable alternative is a decision of the employee not to be in compliance with the policy. The employer owes them no further accommodations.

Unfair Investigation Leads to Termination: Rejected by Courts

On March 7, 2019, Mr. Czerniawski had an argument with a co-worker. The encounter quickly became heated. Emotions were high, voices were raised and, allegedly, threats were made. Mr. Czerniawski was instructed to leave the work premises but refused to do so. Police were called and Mr. Czerniawski was escorted out of the building. He was then told not to return to the workplace until advised to do so. Despite this warning, Mr. Czerniawski appeared at work on March 11, 2019, to deliver a letter detailing his side of the story as he was never interviewed about the event.

An investigation was conducted that found Mr. Czerniawski had made his employees uncomfortable and fearful. The investigation report concluded that Mr. Czerniawski had verbally abused his co-workers and threatened them. The fact police were required to remove Mr. Czerniawski from the workplace caused fear. His return days later, uninvited, also made his employees uneasy and anxious. Notably, all these findings were made without ever hearing Mr. Czerniawski’s side of the story.

On March 14, 2019, Mr. Czerniawski was terminated. There were two stated grounds for dismissal:

) Mr. Czerniawski was acting in a threatening manner to co-workers in an attempt to intimidate them, causing them to fear he would become violent; and
) Mr. Czerniawski was insubordinate by refusing to leave the workplace and then by returning to the workplace to deliver his letter.

The events leading to Mr. Czerniawski’s termination were surprising given that, for all intents and purposes, he had a clear track record with the employer. He was known to be “highly competent” and “very dependable” and “a very solid steady worker”.

Mr. Czerniawski challenged his termination, arguing that he was wrongfully dismissed and that, despite the investigation’s findings, there was not cause for dismissal.

Was There Just Cause for Dismissal?

The trial judge was tasked with deciding whether Mr. Czerniawski’s conduct was “so grievous” as to justify dismissal without notice. In making this determination, one must consider the particular facts of the employee’s misconduct and their overall tenure and disciplinary history. The goal is to achieve proportionality: one must balance the severity of misconduct with the discipline imposed. Termination is, of course, the most severe disciplinary sanction.

In reviewing all the evidence, the trial judge came to the conclusion that the employers’ witnesses likely overstated their evidence. Despite what was alleged against him, it was “clear” on the evidence that the employee did not threaten or physically assault anybody on March 7, 2019.

The trial judge commented specifically on the decision not to involve the employee in the investigation. The trial judge stated:

“[33] I do not agree with the defence submission that everyone knew what had happened and there was no need to include the plaintiff in the investigation. While the plaintiff was aware that he had a verbal dispute over work distribution and that he failed to go home when asked to do so on March 7, 2019, he was not made aware of the particular allegations that his behaviour was threatening, offensive and intimidating, that co-workers allegedly feared violence from him and that there was a genuine concern for employees’ safety, all of which were relied upon as a basis for terminating the plaintiff’s employment.

[34] Had the plaintiff been allowed to respond to the allegations as he requested on March 7, 2019 or as part of the investigation, the employer’s decision may have been more proportional to the misconduct which occurred. While having to call the police when he refused to leave the workplace was undoubtedly upsetting to co-workers and caused a disruption of the workplace, the plaintiff returned to his own workstation after the meeting with Mr. Sandras and Mr. Beliski. He cooperated with the police when they arrived, left peaceably and there were no threats, intimidation or violence.” (emphasis added)

Ultimately, the trial judge found that Mr. Czerniawski’s conduct was “not so egregious” as to justify terminating him without notice.

The lack of a proper investigation, in this case, led to the implementation of disproportionate punishment. Had a proper investigation been conducted, the employer would have been better informed of the circumstances and would have been more likely to arrive at an appropriate punishment. In addition, a proper investigation where the employee is interviewed might actually enable the employer to properly terminate the employee in circumstances where the employee actually admits to the misconduct or does something even worse.

Employment Contract Successfully Limits Common Law Reasonable Notice

by Stacey R. Ball| March 5, 2022August 13, 2023 | Employment Contracts| | General

It is well known that employment contracts of an indefinite period (i.e., not fixed term contracts) give rise to a duty wherein employers must give reasonable notice, or pay in lieu of such notice, to employees whose employment is being terminated without cause. The Employment Standards Act, 2000 provides the absolute minimum period of notice required by such a duty. Reasonable notice under common law, however, can and typically does greatly exceed the statutory minimum requirements, such that a person who may only be entitled to 4 weeks’ notice under the ESA may find themselves entitled to 4 months’ notice at common law.

Obviously, employers will want to avoid having to pay common law reasonable notice if they can. Luckily for them, as the following case demonstrates, all that is required is some carefully crafted contractual language.

Vienneau v. Joy Global (Canada) Ltd.: The Employment Contract

This case concerned the without cause termination of Mr. Vienneau, a 50-year-old employee who had been working with the defendant for over five years. When he was terminated, he was paid only four weeks’ salary in lieu of notice. This, he believed, was too little, and so he commenced an action against his former employer seeking damages as payment in lieu of reasonable notice.

Mr. Vienneau, unfortunately, encountered one major obstacle: his employment contract. Although the contract’s termination clause must be read and understood in its entirety, the following sentence is of particular note:

“… Specifically, you understand and agree that your acceptance of this Employment Agreement limits your ability to claim any further damages for termination pay, termination notice, severance pay, payment in lieu of reasonable notice, or any other damages, other than as provided for in this Employment Agreement and that you are giving up any right to claim reasonable notice under common law. …” (emphasis added).

Does the above clause therefore displace the common law presumption of reasonable notice or pay in lieu thereof? Is. Mr. Vienneau consequently limited to his statutory entitlements under the ESA?

Displacing Common Law Reasonable Notice

In Machtinger v. HOJ Industries Ltd., the Supreme Court of Canada acknowledged that:

“ … Absent considerations of unconscionability, an employer can readily make contracts with his or her employees which referentially incorporate the minimum notice periods set out in the Act or otherwise take into account later changes to the Act or to the employees’ notice entitlement under the Act. Such contractual notice provisions would be sufficient to displace the presumption that the contract is terminable without cause only on reasonable notice. …” (emphasis added).

It is clear that an employment contract can specify terms that displace common law reasonable notice, provided that the employment contract is otherwise legally enforceable.

In Mr. Vienneau’s case, the trial judge felt it would be “nonsensical” for Mr. Vienneau to believe he was entitled to common law reasonable notice given that the termination clause clearly states he would be giving up “any right to claim reasonable notice under common law.”

As a result, it was the trial judge’s view that the termination clause converted the “floor” of the ESA‘s minimum notice period into a “ceiling”, such that nothing could be awarded in addition to the statutory minimum notice. This case can serve as a lesson to employers about how they can protect themselves through their contracts in the event they must terminate an employee without cause. It can also serve as a warning to employees to read their employment contracts carefully, and to have a lawyer review the contract to ensure they are best protected in the event they lose their job.

Successor Employers and Reasonable Notice Periods

In the event of a termination without cause, employees are generally entitled to a reasonable notice period. The purpose, of course, is to provide dismissed employees with an opportunity to find alternative suitable employment. At common law, reasonable notice periods are calculated with reference to a number of well-known considerations, including:

The character of the employment;
The employee’s length of service;
The employee’s age; and
The availability of similar employment.

However, imagine that you have worked with your employer a very long time when, suddenly, the employer’s business is bought by somebody new. The purchaser then offers to continue your employment, and you agree. What happens to the length of service you’ve accumulated with the prior employer? Do you have to start all over?

To find our answer, we will turn to Kitchen v Brandt Tractor Ltd., a decision of the Court of Queen’s Bench of New Brunswick, where a scenario similar to this took place.

The Facts

Mr. Kitchen was an employee of Wallace Equipment Ltd., a company specializing in the sale of heavy equipment. Mr. Kitchen had worked there for eight years when the company was purchased by somebody new: Brandt Tractor Ltd. Brandt, the new owners, offered Mr. Kitchen continued employment following the purchase, and he agreed. Three years and eight months later, Brandt terminated Mr. Kitchen without cause. He was provided four weeks’ working notice.

Mr. Kitchen’s length of service with Brandt was just under four years. If, however, his time with Wallace is included in calculating his total length of service, he would have just under twelve years’ worth of service. This could significantly alter the period of reasonable notice he was entitled to. Of course, Mr. Kitchen took the position that his length of service with Wallace should be included. Was he right?

Should Mr. Kitchen’s Prior Years of Service with Wallace be Included for the Purpose of Calculating Reasonable Notice?

Mr. Kitchen relied on a decision of the New Brunswick Court of Appeal to show that his prior years of service with Wallace should be included. In that decision, the Court of Appeal discussed the common law with respect to successor employers (such as Brandt):

“At common law, a contract of employment for personal service is not assignable without the consent of both parties, so that, where there is no such consent, a sale or transfer of a business from an employer to another terminates the contract of employment with the employee. At that point, the employee is entitled to sue the vendor or transferor for wrongful dismissal and damages in lieu of notice. If the purchaser of the business continues to employ the employee, there is an implied term in the new contract that the employee will be credited with the past years’ service with the vendor or transferor on such matters as notice of termination, unless the employee is expressly advised otherwise. Once the employee accepts employment with the successor employer, however, a new contract of employment is created and the employee, as against the new employer, would lose whatever benefits had accrued by way of the length of service with his previous employer if properly informed by his new employer.”

Based on the above, where an employee continues working for a successor employer, even one who, like Brandt, purchased the assets of the predecessor employer, there is a rebuttable presumption that the previous years of service count towards calculating reasonable unless the successor employer has advised the employee otherwise.

Therefore, the question becomes whether or not Brandt rebutted the above presumption by informing Mr. Kitchen that his service with Wallace would not count towards reasonable notice. The trial judge looked at the employment contract to determine whether it expressly excluded Mr. Kitchen’s years of service with Wallace from the calculation of reasonable notice on termination. The trial judge held that the employment offer made by Brandt to Mr. Kitchen was not sufficient to put him on notice that, if he accepted employment, his prior years with Wallace would be discounted.

For that reason, his years of service with Wallace were included. Despite working with Brandt for less than four years, Mr. Kitchen was credited with eleven years and eight months of service in calculating his reasonable notice period.

Arbitration: Employee Must Disclose Vaccination Status

An arbitration decision released January 12, 2022 has joined the persistently growing list of decisions upholding COVID-19 vaccination mandates, as well as the discipline contemplated for those employees who fail to meet the mandate’s requirements.

In Teamsters Local Union 847 v Maple Leaf Sports and Entertainment, Arbitrator Norm Jesin was tasked with deciding whether or not the MLSE’s vaccine mandate violated the existing collective agreement, employment contracts or any relevant legislation by requiring employees to disclose vaccination status, and for placing non-conforming employees on unpaid leaves of absence.

The Parties

The employer, in this case, was MLSE, the operator of a number of professional sports teams such as the Toronto Maple Leafs and Toronto Raptors. The employee in question worked at the Scotiabank Arena. The employee’s job involved converting the arena from one type of event to another (i.e., from a concert venue to a hockey rink, etc.). He had been working there for ten years. In the course of his employment, he would be placed in close proximity to up to 100 people at a time, including sometimes professional athletes.

The Vaccine Policy

In compliance with provincial government requirements, the employer implemented a vaccine policy requiring its employees to be fully vaccinated by October 31, 2021. The policy provided that all information related to an employee’s vaccine status, or any underlying medical information, would be kept confidential and remain anonymous. Employees would disclose their vaccine status through a secure third-party portal. The employer made all employees aware that if they were to breach the policy or fail to be in compliance by the deadline, they would be placed on an indefinite unpaid leave of absence and may even be subject to termination.

The employee refused to disclose his vaccinated status and therefore was not in compliance with the above policy. He was thereafter placed on an unpaid leave of absence. In his opinion, the employer was violating his seniority rights by not allowing him to work in the circumstances. Furthermore, his Union took the position that his vaccine status was private medical health information that could not be subject to disclosure.

The employer, on the other hand, argued that the employee’s right to work is subject to an employee’s ability to perform the work. It was their right under the collective agreement to establish a vaccination mandate. They had the right to implement this policy. In following the policy, any employee who does not disclose their vaccine status is not able to establish their ability to perform the work. Furthermore, the employer argued that privacy rights are not absolute and must be balanced against other interests, such as the employer’s obligation to protect its employees.

Arbitrator Jesin’s Decision

Arbitrator Jesin disagreed with the Union’s argument that the employee’s seniority rights were being denied. Instead, he held that the employer had established that being vaccinated was a necessary qualification for the performance of work, and that such a determination was “reasonable given the pandemic that presently exists.” Additionally, having such a vaccine mandate was a reasonable and appropriate means for the employer to fulfil its obligations under the Occupational Health and Safety Act. The employer was protecting its workers and had taken the appropriate steps necessary to ensure the confidentiality of any disclosed information.

Ultimately, Arbitrator Jesin determined that the employer had not violated the collective agreement. They had not violated any relevant legislation. They were permitted to require the grievor to disclose his vaccination status, and they were permitted to place him on an unpaid leave of absence for his failure to comply. As such, his grievance was dismissed.

Arbitrator Jesin noted:

“It is clear that the weight of authority supports the imposition of vaccine mandates in the workplace to reduce the spread of Covid 19.”

His observation is sound. Recent jurisprudence on the enforceability of vaccine mandates, at least in the unionized work environment, appears to favour the implementation and application of such mandates, citing, in particular, the vital need to protect workers. When, or if, an arbitrator, court or tribunal eventually does break away from this jurisprudential trend, it will be interesting to see on what basis they justify their departure.

Emailing Your Lawyer from Your Work Email: Solicitor-Client Privilege

by Stacey R. Ball| March 2, 2022August 13, 2023 | General| | Wrongful Dismissal

In Jean-Sébastien Leroux v. Proex Inc., 2022 ONSC 319, an employee made a mistake that no employee should make: they used their work email address to communicate with their wrongful dismissal lawyer. This is dangerous. If your employer is able to access your work email, then you run the risk of them discovering the confidential legal advice you received from your lawyer.

In this case, the employer went further than simply discovering the emails – they attempted to rely on them in a wrongful dismissal proceeding. The employer included emails between employee and lawyer in their affidavit of documents. The employee, in response, brought a motion to the Ontario Superior Court seeking an order that the emails be removed from the affidavit of documents on the basis that they are protected by solicitor-client privilege. Further, the employee sought an order requiring the employer to return the emails and destroy any copies.

The Law: Solicitor-Client Privilege

Whether the employer would be able to use the emails depended largely on whether they fell within the category of solicitor-client privilege. According to the Supreme Court of Canada, solicitor-client privilege is “fundamental” to the Canadian legal system and has “evolved into a fundamental and substantive rule of law.” They have said that solicitor-client privilege must be “as close to absolute as possible to ensure public confidence and retain relevance.” Clearly, the importance of solicitor-client privilege will not be easily overcome.

What does solicitor-client privilege apply to? According to the Supreme Court, the privilege applies to:

a communication between solicitor and client;
which entails the seeking or giving of legal advice; and
which is intended to be confidential by the parties.

The privilege covers any consultation for legal advice, whether litigious or not. To be privileged, there must be a subjective expectation of confidentiality which is reasonably objective in the circumstances.

Application to the Case

In this case, the employer admitted that the first two branches of the test were met. However, they argued the emails were not protected by solicitor-client privilege because they were not “intended to be confidential by the parties.” On the other hand, the employee argued that the emails were intended to be confidential and that he had a clear and confirmed subjective expectation of confidentiality with respect to the emails.

The employee had been using his business email for both professional and personal purposes ever since the founding of the employer company. He had been doing this for 21 years. The employer never complained about this practice. Furthermore, it was admitted on cross-examination that nobody within the employer’s organization would have had the authority to access and read the employee’s emails without his consent. For that reason, the employee would have had a reasonable expectation of privacy when it came to his business email.

The employer also never had a policy concerning the use of company email accounts. There was accordingly nothing to put the employee on notice that his emails with his lawyers were not confidential. In any event, the emails the employee received from his lawyers contained confidentiality warnings at the bottom. As such, there were explicit confidentiality warnings contained within the emails.

Given all of the above, the trial judge concluded that the employee expected his emails to be confidential and that this expectation was objectively reasonable. As a result, the emails contained all three elements of solicitor-client privilege and were consequently protected. The trial judge concluded that the emails should not be included in the employer’s affidavit of documents.

This was a costly decision for the employer. The trial judge found the employee to have been “entirely successful”, and ordered the employer to pay the employee $12,000 to cover his legal costs. Employers should be aware of the near absolute nature of solicitor-client privilege and should be very careful to not act contrary to it.

Fixed Term Contracts as a Form of Reasonable Notice

by Stacey R. Ball| March 1, 2022August 13, 2023 | Employment Contracts| | General

When considering the duration of an employment relationship, there are two primary options: either the employment period is for a fixed term, meaning the parties agree that the relationship lasts only until a specified date, or the employment period is indefinite, meaning it continues until it is terminated, for example, by the employee resigning or being fired.

The distinction is quite important. The termination of a fixed-term employment contract is treated quite differently than the termination of an indefinite employment relationship. This is sometimes good for the employee. Sometimes, it is not. In Makela v Horizon School Division No 67, the employee Mr. Makela likely wished he had agreed to an indefinite employment agreement.

The Facts

Mr. Makela worked for his employer, Horizon School, for approximately 9 years. His employment contract was a fixed-term contract which specified May 31, 2016 as the end of the employment relationship. Unfortunately, Mr. Makela did not make it this far. He was terminated from his position in March of 2016. Being a longstanding employee, Mr. Makela likely expected to receive a somewhat substantial severance package – maybe even several months’ pay. What he ultimately received was disappointing: he was paid only until May 31, 2016, the end of the fixed-term contract.

Upset, Mr. Makela commenced an action for wrongful dismissal damages arguing that he was not provided sufficient reasonable notice at common law.

Fixed-Term Contracts and Reasonable Notice

The trial judge did not agree with Mr. Makela. At common law, the contract of employment remained a five-year fixed-term contract, and Mr. Makela was paid for all five years. Where contracts provide a specified end date, such as Mr. Makela’s contract did, then the contract itself is said to serve as a form of reasonable notice. For that reason, the trial judge dismissed Mr. Makela’s claim for termination without reasonable notice or pay in lieu thereof.

This appears to be the right result. It is well understood that the common law principle of termination on reasonable notice does not apply to fixed-term employment contracts. The Ontario Court of Appeal has said as much. Where an employee working pursuant to a fixed-term employment contract is terminated prior to the specified end date, they are entitled only to the income they would have earned for the remainder of the specified contractual period, unless they were terminated for cause or the contract provided a specific notice period that is less than the reminder of the term. Mr. Makela was terminated prior to the completion of the five year term, but he was paid the balance. His employer, therefore, had already met their obligations to him and he was entitled to no more.

Had Mr. Makela been working pursuant to an indefinite employment agreement, he likely would have received much more upon termination. Interestingly, if Mr. Makela had made it to the end of the fixed-term contract and continued working without entering into a new agreement with his employer setting out a new end date, his contract would have become an indefinite contract subject to termination on reasonable notice. In that scenario, his case likely would have succeeded. Unfortunately, that was not the case, and Mr. Makela was stuck with the terms of the agreement he signed.