The question arose whether a fixed term contract may be terminated before the specified date of termination in the contract. However, there are several reasons an employer may wish to end a fixed-term employment relationship early. We recommend 4 weeks’ notice. In this situation, the employer has no obligation to provide any notice or severance compensation, unless that requirement appears in the contract. A genuine contract for a specified period may terminate by the passing of time at the end of the period rather than by termination at the initiative of the employer. Many employers unknowingly expose themselves to significant liability by purporting to end a fixed-term contract early. Court of Appeal decisions in Zaraweh v. Hermon, Bunbury & Oke and Giza v. Sechelt School Bus Service Ltd., the legal effect of giving inadequate notice of termination of an employment relationship will depend on all the circumstances of the case. As discussed in the B.C. Although depending on the nature of your job, and any other provisions which have effect after the contract terminates, like a restraint clause. In British Columbia, for example, section 5 of the Employment Termination Standards (B.C. If an employee quits before the expiry of a fixed term contract — and if the contract doesn’t contain language permitting early resignation — the employee’s action will amount to a breach of contract. Please enter email address below to subscribe. Can the employee give notice of termination before the end of the contract? The major benefits of a fixed-term employment contract are that that the employer can conclude the employment relationship on the expiry date without having to give a reason for termination (such as misconduct or poor performance). In such situations the employer would be forced to continue employing the employee or would need to pay the employee for the balance of the contacted period. We at D&L would be happy to review your existing employment contracts or assist you in creating a contract which is binding under current law. In British Columbia, for example, section 5 of the Employment Termination Standards (B.C. Since Howard v Benson, 2016 ONCA 256 (CanLII) which held that fix-term contract employees who have no early termination provision are not entitled to common law notice of termination, but instead breach of contract damages amounting to the amount of money they would have earned under the contract, regardless of whether they have found new employment. The decision can simply be made to not renew the term of the contract. 181 University Avenue, Suite 2100 While reinstatement to employment may be available in this situation in Québec (see Boivin v. Orchestre Symphonique de Laval 1984 Inc.), employees in the common law jurisdictions will likely be limited to an action for wrongful dismissal damages. In order for an early termination clause to be useful to the employer, it must legally limit the employees’ entitlement to less than what the employee would have received if there was no termination clause at all but no less than that of the Employment Standards Act (“ESA”) minimums. The most pressing question for an employer is what happens when they want to terminate a fixed-term employee without cause before their term has run out. Is a fixed-term contract really necessary? When employers want to terminate a fixed-term contract before the expiry date, it would seem to make sense that this could be done, as long as they pay the employee for the full term.However, a recent Labour Court case has highlighted the fact that premature termination of employment may amount to an unfair dismissal. Employee only has a duty to mitigate if there is a clause in the employment agreement (indefinite contract or fixed contract) that specifically states that the employer has a duty to mitigate.[8]. Subscribe to the Canadian HR Newswire to get the must-read news & insights in your inbox. Fixed term contracts and the fair work system It is generally well known that a fixed term contract of employment (ie one which will terminate at an agreed term) will operate so that the employee cannot sue for unfair dismissal if the employer decides not to offer fresh employment or … If the employee gives notice, can the employer refuse the notice and terminate immediately with no further liability? [CDATA[// >, > Franchising, Licensing, Distribution & Supply Chain law British Columbia, for example, 5! # 4: dismissal during a fixed-term employment relationship early, an employer will not be treated less favourably a... Ca ), 2001 CanLII 8589 ( on CA ), 55 O.R rule it unenforceable of..., for example, section 5 of the contract early Zaraweh v. Hermon Bunbury. Be forced to pay the remaining terms of the contract speak to Christina please call 416-369-7832 or an... 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