Unsigned Employment Contract Upheld by B.C. Court

Not All Contract Breaches

Many employees might believe that because they never physically signed their written employment agreement, it does not apply to them. A recent decision of the Supreme Court of British Columbia, however, might suggest otherwise. Here, a termination provision found within an unsigned employment contract was upheld.

The Facts and Impugned Termination Provision

The employee in this case had worked for the defendant employer for approximately fourteen months before being terminated without cause. The employee was 34 years old when his employment was terminated. When he was terminated, the employee was given two weeks’ pay in lieu of notice. This amount sufficiently provided the employee with their statutory minimum entitlements under the Employment Standards Act.  However, the employee felt he was entitled to much more and claimed nine months’ reasonable notice or pay in lieu of notice.

According to the employer, the statutory minimum of two weeks’ pay is all the employee was entitled to under his employment contract. That employment contract contained the following termination provision, the wording of which was not in dispute:

  1. c) Termination Without Cause. The Company may terminate your employment at any time in its sole discretion, for any reason, without cause or serious reason, upon providing to you:
  2. that minimum amount of advance notice (or pay in lieu) to which you are entitled on termination of employment under the applicable employment or labour standards statute or law in the province where you are assigned to work for the Company at the time your employment is terminated (the “Act”), and
  3. any other minimum amounts or entitlements to which you are entitled on termination of employment under the Act, including: (A) statutory severance pay; and/or (B) for that minimum period required by the Act, continuation of any benefits in which you are enrolled as of the date you receive notice of termination.

In the employee’s opinion, this termination clause was illegal and unenforceable because, among other things, he never signed it and never agreed to its terms. Of course, the employer’s position was that the termination clause was enforceable and limited the employee to the statutory minimum. As a result, the key issue in this case concerned whether or not the contract’s termination provision was enforceable notwithstanding that the employee never signed it. If enforceable, the termination provision would indeed operate to limit the employee’s entitlements to the statutory minimum.

The Enforceability of the Employment Contract

Even if the employee had not signed the agreement, the employer believed the trial judge could infer from all the surrounding circumstances that the terms of the contract were set out and were accepted by the employee and thus binding on him. Notably, the employee was sent a variety of different employment contracts that had been revised per his input. However, despite his many requests to the contrary, the termination provision was never changed. His input as it pertained to the termination provision was never adopted by the employer.

Given the above, the trial judge determined the employee was aware that the termination clause was non-negotiable. Despite his many attempts to negotiate the term, it remained unchanged. The employee had been successful in negotiating other terms resulting in significant improvements in his favour, but never the termination provision. Ultimately, the trial judge determined as follows:

“[67]      When viewing the evidence as a whole, I am satisfied that the October 30, 2019 document, even if unsigned, represents the employment contract negotiated between the parties. As such, I find the plaintiff knew the termination clause was part of the contract and that he was bound by it. For reasons already stated, I agree the plaintiff’s credibility is diminished on that aspect and I specifically find I cannot rely on his statement that he never agreed to the termination clause.” (emphasis added)

In the end, the trial judge held that the termination clause was clearly part of the employment contract and that it was clear and therefore enforceable. The employee was entitled to no more than the statutory minimum as stated in the employment contract.

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