If you’ve worked for the same employer for an extended period of time, have had a change in job description, or received a promotion, your original employment contract may be out-dated. At the time of hire, written commencement contracts typically contain fixed notice clauses. This generally means that at the time of your dismissal, an employer doesn’t have to provide you with reasonable notice. This may be sufficient for a short-term or entry-level employee, but not for a long-term employee who has risen in the ranks and occupies an upper-level position.
Employment Contracts - Fixed Notice Vs. Reasonable Notice
An employment contract with fixed notice generally means that the employer will only provide the minimum notice required; as stated by the Employment Standards Act. In BC, this roughly equals one week per year of service; up to a maximum of eight weeks. As mentioned before, this amount of notice is fine for a short-term or entry-level position. However, it’s hardly fair for an employee who has been promoted into a management- or senior-level. This calibre of employee shouldn’t be bound by fixed notice in an old contract; more than likely he/she is entitled to reasonable notice.
An employment contract without a fixed notice provision means that the employer is bound by the common law and is required to provide reasonable notice. What’s the difference? Reasonable notice can be up to ten times greater than minimum notice. This makes a huge difference for a higher ranking, long-term employee.
Do you know what’s in your employment contract, or has it been so long, you can’t remember? The good news is that if you have a notice-limiting provision in your contract, it’s probably only valid for a short period of time.
Old Employment Contract Laws - What the Courts have to Say
The case of Wallace vs. Toronto Dominion Bank in 1983 set the precedent for fixed notice in employment contracts. The courts recognized that an extended period of service resulted in substantial changes in duties and/or job description for the employee. As a result, the notice limitations in the contract were ignored and the employee was awarded common law reasonable notice instead. The courts cited the following reasons:
- Fixed notice provisions are usually intended for lower-ranking positions, typically lasting between 1 to 2 years.
- Fixed notice isn’t necessarily applicable for long-term employees who have been promoted to more senior positions. Reasonable notice may be required.
- Longevity and promotion can change the entire foundation of an employment situation and it’s only fair that the notice provisions should reflect those changes.
What does that mean for you? Time and circumstance can alter everything, including whether or not your employment contract is valid. If you’ve stood the test of time and have advanced your position in the workplace, odds are you’ve earned the right to receive reasonable notice. To find out what you’re legally entitled to, contact Employment Lawyer, Bob Yeager.
