Challenge of contract provisions a no-go for Nova Scotia engineer

Agreement met legislative minimums, employee just regretted signing it: Court
By Jeffrey Smith
|Canadian HR Reporter|Last Updated: 04/17/2015

A Nova Scotia court has dismissed a fired employee’s claim that his employment contract was void because of a non-compliant severance provision and an inaccurate job description.


Antoine Moarbes, 35, was hired in 2010 by Heka Electronics, a provider of instrumentation for biomedical and industrial research clients in Mahone Bay, N.S., to be an electronics hardware design engineer. 


At the time of hiring, Heka sent Moarbes an offer of employment for him to sign and return. The offer said frequent travel to Europe and in North America would be required.


Moarbes reviewed the offer and suggested changes, including a change to the job title. Moarbes also asked for flexibility in his start time — including leaving the office at 3 p.m. on Thursdays — one day per week of telecommuting and a shortened workweek. 


In addition, he asked for one month of severance for each year worked in the event of termination without cause.

Heka consented to changing the job title and said the travel would only be “a couple of times per year.” The company didn’t agree with the severance entitlement or Moarbes’ other suggestions. 


The revised offer of employment carried a termination clause that stated Moarbes would be entitled to seven days’ advance notice of termination for each complete or partial year of employment — or the equivalent in salary and vacation pay, but not unused sick days, in lieu of  notice — in the event of termination without cause.


It stated that if the termination provision was “in conflict with the Labour Standards Code of Nova Scotia, or any successor legislation, then that legislation will override this specific provision.”


Moarbes was concerned that if he didn’t accept the job offer, it would be taken off the table, so he didn’t bother consulting a lawyer. On Oct. 4, 2010, he signed the revised offer and started work. The revised offer said Moarbes’ duties were “to design, develop, troubleshoot and improve the hardware platforms and assemblies consistent with Heka’s products and market requirements.” He would report to Heka’s president.


Heka was a small company that didn’t “stand on ceremony too much,” and employees were sometimes expected to do different things at different times, depending on the company’s needs. As a result, Moarbes felt he took on a larger role than initially indicated. He became an “unofficial go-between” for the small staff in the Canadian office and Heka’s president — who was usually in Europe — and an independent contractor who helped run the Canadian operation.


Over a period of three years with Heka, Moarbes went on two trips outside of Canada. He requested additional trips to maintain professional relationships with key people, but Heka felt electronic communication was enough for such purposes.


Moarbes was asked to participate in developing user requirements — requiring interaction with customers — and translating them into technical requirements, which he felt was outside the scope of his job duties as described in the offer of employment and what he had done in similar positions with previous employers.


In 2012, Heka hired a human resources consultant to evaluate the company’s salaries. Moarbes requested his compensation be changed to give him greater flexibility in attendance at work, so Heka reached an agreement with him for a four-day workweek averaging 36 hours per week. His salary was converted to an hourly rate, requiring him to submit timecards.


In February 2013, Heka hired a German-trained software engineer and Moarbes was asked to train him to help him become licensed in Canada.


On Oct. 8, 2013, Heka terminated Moarbes’ employment for shortage of work. Moarbes filed a claim for wrongful dismissal, saying Heka acted in bad faith by making him train a replacement employee and creating a surplus of engineers in the company. He also said his employment contract was void because it did not comply with the minimum advance notice of termination provisions in the code by making a severance calculation based only on salary and not other entitlements such as benefits and vacation pay.


Moarbes also claimed the original employment offer potentially breached the Labour Standards Code because it required him to give two weeks’ notice of resignation, while the code only required him to give one week’s notice.


Court rules

The court found that the code did not have a requirement for compensation for unused sick days or other benefits such as RRSP contributions. 


These did not fall under the code’s definition of pay, which stipulated “wages due or paid to an employee and compensation paid or due to an employee…but does not include deductions from wages that may lawfully be made by an employer.”


The court also found Moarbes’ argument that the job offer was void because it didn’t meet the code’s requirements for notice 

of resignation to be “absurd,” since it didn’t affect his entitlement to notice of termination by Heka. 


In addition, if the resignation provision was void, it was separate from the rest of the agreement and did not void the entire agreement, said the court.


Regardless of the viability of the termination and resignation clauses in the employment agreement, the court found Heka fully paid Moarbes for the work he did for the company and the three weeks’ pay in lieu of notice was in compliance with the code’s minimum notice requirements. 


Though the engineer may have otherwise been entitled to more common law notice, the signed agreement displaces any such entitlement. Also, given that he was paid his full statutory severance, there was no evidence Moarbes suffered any loss, said the Nova Scotia court in upholding the revised job offer.


The court also found the job duties outlined in the offer were broad enough to cover the work Moarbes actually did, particularly since it was a small office with only a few staff. Though Moarbes may have taken on the role of a go-between, his job duties did not change and he unilaterally accepted that role. 


Additionally, the amount of travel was well within the impression given at the time of the job offer, said the court.

Finally, Heka did not exert pressure on Moarbes to sign the agreement at the time, found the court. Though he may have been concerned the offer would be revoked if he continued to try to negotiate changes before signing, there was no suggestion the offer would be revoked.


“While Mr. Moarbes characterized this case as one where there was a lot of miscommunication and unaligned expectations, I find that it is really a case of Mr. Moarbes having entered into a contract that he subsequently regretted, but there is no viable reason why he should not be held to its terms despite how much he might dislike them now,” said the court in dismissing his claim.


For more information see:

Moarbes v. Heka Electronics Inc., 2015 CarswellNS 174 (N.S. Sm. Cl. Ct.).


Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. He can be reached at jeffrey.r.smith@thomsonreuters.com or visit www.employmentlawtoday.com for more information.

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