Black J. noted that the assignment contract implicitly took into account the scenario in which the contract was terminated before the end of the two-year period. Although there is no explicit termination mechanism, the contract contained the phrase “subject to early termination under this Agreement”. If the termination is made without a provisional termination clause, the terminating party is liable for damages. This allowance corresponds to the amount of the salary for the remaining duration of the employment contract. The judge may moderate the amount of the indemnity, but not unless the salary for three months. To avoid widespread complications, employees on fixed-term contracts should not be considered “at will” workers. However, employers may include “early termination clauses” in fixed-term employment contracts with the same effect. (We`ll come back to this a little later.) The non-renewal of a fixed-term contract is treated as a dismissal, so that if the contract is not renewed, the fixed-term employees also have: In Nader v. University Health Network, the applicant employee was employed by the University Health Network (UHN) as Executive Vice-President. Under his agreement with UHN, he was entitled to 12 months` salary if he was dismissed without giving reasons. As a starting point, it is important to understand the difference between permanent and temporary employment.
The key elements of a permanent working relationship are continuity and security. This is considered a norm, i.e. typical or standard labour relations, and our labour laws are largely based on these relationships. Employment relationships that deviate from this standard are called non-standard or atypical employment relationships, which typically include casual work, independent contractors, part-time workers, and term workers. “He could easily have formulated the form and associated documents in such a way as to make it clear that the employment relationship will be terminated no later than the specified date and will be subject to early termination for operational reasons.” Fixed-term workers have the same minimum rights as permanent workers. Find out what a fixed-term contract is, what additional protections are for fixed-term employees, and how you can terminate and renew a fixed-term contract. Fixed-term contracts are usually concluded for a certain duration (defined by time), for a specific purpose (for a specific project or until a certain event occurs) and normally end either at the end of the agreed time or for the purpose for which they were concluded. Legitimate grounds for early termination of a fixed-term contract include fair dismissal within the meaning of the Employment Relations Act 1995 or termination by mutual consent of the parties. A fixed-term contract, i.e. a short-term contract for a certain period, can be used for temporary or seasonal workers whose skills are not needed throughout the year.
Unless there is an extension, a fixed-term contract expires on a predetermined end date. For example, if you are a term employee with a three-month contract and a comparable permanent employee has a company car, your employer may not offer you one if the cost is too high. Your business travel needs can also be met in other ways. The complainant initiated the proceedings on the grounds that the secondment contract was a fixed-term contract from which he was entitled to his salary for the remainder of the term in addition to the payment of 12 months, as required by the agreement with UHN. Grounds for dismissal without giving reasons may be as follows: In October 2016, a Canadian court of appeal ruled in favour of John Howard. Howard worked as a trucking shop manager and later as a sales development manager with a five-year fixed-term contract. After 23 months, he was released for no reason. He sued his employer for the cost of his salary and benefits for the rest of his contract. After the appeal hearing, he was awarded the full amount remaining in his fixed-term contract.
His reward amounted to more than $200,000 in damages. The absence of requirements for the premature termination of a fixed-term contract was decisive for his victory. Termination without giving reasons is the opposite of termination with just cause, and it is also much more common. Dismissal without giving reasons does not necessarily mean that there was no reason for the dismissal of an employee, but rather that the dismissal was a judgment of the employee rather than the result of a specific and pre-agreed scenario that was fulfilled. Fixed-term contracts usually end automatically when they reach the agreed end point, so your employer doesn`t have to let you know. However, your employer must continue to act fairly and, if necessary, follow a dismissal procedure. In the event of legal termination of this fixed-term contract before its expiry, the employee is not entitled to compensation or damages against the company. The provisional termination clause allows for the early termination of a fixed-term employment relationship.
The clause must meet a number of formal requirements: however, if the parties to a fixed-term employment contract do not specify a notice period, it is possible that at the end of the contract, the employee will be entitled to the salary he would have received until the end of the contractual period. Dismissal procedures may also vary depending on the reason for the employee`s dismissal. If an employee is deemed to have resigned “without good reason,” which may include leaving another job, the employee may receive the above treatment. However, if the dismissal is made “for a good reason”, which is an advantageous reason for the company, such as helping to restructure the company, the employee may receive preferential treatment, such as a generous severance package often referred to as a “golden parachute”. In today`s ever-changing work environment, it is extremely important for employers to ensure that their employment contracts include their specific requirements. In this context, employers must ensure that any fixed-term contract contains a clause allowing for early termination. This article examines what can happen if an employee is dismissed before the end of the term specified in the fixed-term contract. We are also reviewing a recent decision of the Supreme Court of Ontario in which an employee held that he had been dismissed under a fixed-term employment contract and that he was entitled to his salary for the remainder of his term. Less favourable treatment of fixed-term workers is allowed if your employer can prove that there is a good reason to do so. This is called “objective justification.” The conclusion in Buthelezi and Nkopane, supra, that there is no common law right to terminate a fixed-term contract prematurely, unless the fixed-term contract provides for such a right, was confirmed in Lottering and Others v.
Municipality of Stellenbosch (2010) 12 BLLR 1306 (LC). In paragraphs 14 and 20, the Court held that labour laws vary considerably from one country to another, as do their protection for fixed-term workers. Some countries offer employers and employees a great deal of leeway in their fixed-term contracts, while others are very rigid. For example: A fixed-term worker who was dismissed before the end of his contract may be entitled to the compensation he would have received if he had worked until the end date of the contract. Employers can avoid this trap by including an “early termination clause”. This includes guidelines for the premature termination of the relationship “for no reason” and clearly states the amount of severance pay the employer will pay instead of the full salary for the period. Using fixed-term contracts can be the best way for your business to keep the budget balanced while moving important projects forward. By exercising caution, your company can avoid violating the rights of temporary workers.