Time and circumstance can render your employment contract invalid

Does your employment contract accurately reflect your current working conditions?  Spending any length of time with the same employer can result in changes to your job description, title, salary and more. What many employers fail to realize is that it's their responsibility to update employment contracts to accommodate such changes.

Agreements must clearly describe the precise and current circumstances of the employee's position and his or her responsibilities. Without updated and accurate information, the employment contract, its notice provisions or termination clauses may be unenforceable.

If the courts determine that an employment contract is invalid, it could mean that the employee is eligible for full or reasonable notice under the common law, and is not restricted by the notice provisions contained within that invalid agreement.

A wrongful dismissal reveals an outdated employment contract

A 57-year-old program manager worked for a local non-profit organization for over 12 years. Nearing her 13th year with the company, she was dismissed without cause and given a paltry 8 weeks’ notice. Her letter of termination stated that her position was no longer available due to funding cuts and that she did not have the required skill set for any of the newly created positions. As a result, she filed a claim for wrongful dismissal and sought damages for reasonable notice, costs for retraining, and lost benefits.

Employment Contracts: the Difference between Probationary Terms and Indefinite Terms

For the courts to determine the validity of an employment contract, a thorough examination of the working relationship and its conditions must be conducted. In this case, it was revealed that the employee was originally hired under a non-negotiable probationary contract. It included a termination provision that stated that she would receive no more than the minimum notice according to the Employment Standards Act. Although the employee didn’t fully understand the Act or its consequences, the agreement was not explained to her and she was not advised to obtain legal advice from an employment lawyer. After the six-month probationary period had elapsed, the employee was hired on full-time.

Throughout her history with the company, her employment contract was only revised a handful of times but included the same termination clause whereby she would receive minimum notice. At the time of her dismissal, she had been working without an employment contract for over 14 months.

The employer claimed that the terms of the probationary agreement and its minimum notice provision still applied to her position 12 years later. As such, the employer chose to give her 8 weeks’ notice because the employer relied on the outdated agreement.

The court declared that the outdated agreement was unenforceable. The probationary period had long since passed and the working relationship between employer and employee had evolved into an indefinite term. The probationary agreement didn't make any mention of the continuance of its terms in the event that the employee was hired indefinitely. Because the employment contract was declared invalid, the employee was not restricted to the minimum notice of eight weeks. Instead, she received reasonable notice of 18 months.

This notice amount was determined according to her age, skill level, and availability of work in her profession.

If you have questions or concerns about your notice provisions or a potentially outdated employment contract, please contact Yeager Employment Law.


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