An Ontario Court today released a decision dealing, in part, with whether the periods of time during which an employee was employed on a fixed term contract basis or under a written contract of employment ought to be included in her length of service for the purposes of determining the period of reasonable notice. The case is Branch v. CIBC.
In the absence of a legally enforceable employment contract that deals with the issue, an employer may terminate an employee's employment summarily without notice for just cause or, in the absence of just cause, upon reasonable notice or pay in lieu of notice.
In deciding on the period of reasonable notice, Courts will look at an enumerable number of factors with the starting point being the following from Bardal v. Globe & Mail:
- the character of employment;
- the length of service;
- the employee's age; and
- the availability of similar employment having regard to the experience, training and qualification of the employee.
In the Branch case, the employee was subject to relatively short period of contract employment during which she was bound by employment agreements. She held the position of risk manager pursuant to a fixed-term contract for about 8 months. Thereafter, for two months she held the position of temporary, on-call staffing officer pursuant to an employment agreement that restricted her notice entitlement to that prescribed by the Canada Labour Code. She then became a full-time permanent employee and worked for the Bank for 9 months until her termination without just cause.
The Bank argued that the two periods of "non-permanent" employment should not be counted towards her length of service because she was bound, during those times, by written contracts of employment that displaced the common law presumption of reasonable notice in one way or another. In other words, you just look at the 9 months while she was employed in the permanent position.
The Court accepted that the period of fixed term employment (July 16, 1998 to March 15, 1999) should not be counted in determining the employee's length of service because for common law purposes, in a fixed term relationship, "the requirement that the Bank provide reasonable notice is not applicable as the contract comes to an end at the end of the term".
However, the Court included the period of "temporary" employment in calculating the length of service and in doing so said:
In contrast, the contractual employment from January, 1997 to July, 1998 did not contain a fixed term but rather, limited the amount of reasonable notice to be given to that provided for by the Canada Labour Code. Reasonable notice, although specified by the contract, was applicable.
This is a short case, with not a lot of facts, but the dates are confusing (to me at least). The dates where the employee held a temporary employment, according to the case, were from March 15, 1999 to May 19, 1999 during which time the employee could be terminated, without just cause, in accordance with the Canada Labour Code.
With respect, where the contract of employment specifies the applicable period of notice of termination and where the contract is otherwise legally enforceable and not void as being contrary to statute, for example, or otherwise void for some reason, the contract is said to displace the common law presumption of reasonable notice. The employee is entitled to the contractual notice, not the common law reasonable notice.
So, while I completely understand the desire to include some (or all) of the service in the calculation of length of employment, I wouldn't have gotten there in the way that the court did here. I might have gotten there in a different way (which I will save for another day).
That said, the Court appears not to have included the period of fixed term employment in the calculation of length of service for common law purposes which, I am certain, will cause some anxiety to plaintiffs counsel.
That said, this case seems to support the argument that periods of fixed term employment can be discounted when calculating length of service for common law reasonable notice purposes. It is important to be mindful of the Court of Appeal's analysis in Ceccol.
This is a significant finding in view of the fact that many employees are hired for fixed periods under contract prior to being hired permanently.
The Court determined that the applicable period of reasonable notice was 4 months and in doing so was influenced by, among other things, the employee's short length of service.