27 consecutive 1-year contracts make teacher permanent employee

School contended woman was fixed-term employee and not entitled to severance pay
By Jeffrey Smith
|Canadian HR Reporter|Last Updated: 11/28/2016

A Saskatchewan employee whose fixed-term contract wasn’t renewed is entitled to severance pay befitting a permanent employee — after 27 consecutive one-year contracts, an adjudicator has ruled.

Kim Latoski was hired on a one-year contract to be a teacher at Bernard Constant Community School in Melfort, Sask., by James Smith Cree Nation (JSCN) in August 1987. JSCN only gave teachers one-year contracts because of budget uncertainty for each year, which was based on the number of students and funding from the federal government.

So if JSCN wanted Latoski back for the following school year, it would offer her another one-year contract. Her employment continued for 27 consecutive years. Each year, JSCN would either offer Latoski a new contract, offer an extension to her existing contract, or offer her a new teaching position.

On a few occasions, JSCN didn’t notify her of her new contract and both sides assumed things would continue as usual.

Each year’s contract was called “Employment Contract — Teacher” or “Definite Term Contract — Teacher” and outlined the term of employment as running from late August to June 30. It also indicated “the employer may, at its sole discretion, by notice in writing to the employee, offer the employee a further contract for an additional term or terms.”

A typical contract also stated that if funding to the program was terminated or substantially reduced, the contract would be terminated with the equivalent of one month’s pay.

Latoski considered herself a permanent employee. It was assumed a good evaluation meant contract renewal — and Latoski received positive evaluations. She eventually moved into a home on JSCN land. She also was a member of the pension plan and was allowed to carry over unused sick leave.

In 2014, JSCN lost some funding for the special education program — which Latoski had taught for 10 years — and was faced with a budget deficit. So, in May 2014, JSCN advised Latoski her contract wouldn’t be renewed and her last day of work would be the end of her current contract — June 27.

Latoski requested severance pay equaling two days of regular wages for each of her 27 years of employment, but JSCN argued she wasn’t entitled to severance pay as she was a fixed-term employee.

Latoski filed a complaint under the Canada Labour Code, claiming she had continuous employment with JSCN and was a permanent employee, but an inspector investigated and determined Latoski was a fixed-term employee so she wasn’t entitled to notice of dismissal or severance pay.

So Latoski appealed the decision, arguing that while the contracts referred to the term of employment, the JSCN’s personnel and policy manual had a clause stipulating that educational program employees for more than five consecutive years “shall be offered an indefinite contract in their sixth academic year.”

The adjudicator noted that Latoski had never specifically been offered indefinite employment as described by the manual. Other provisions were also not strictly followed, such as employees giving written notice by April 1 each year regarding their desire to continue employment — instead, JSCN usually started things by making an offer.

The adjudicator found that Latoski’s contracts didn’t provide for automatic renewal. However, over 27 years, the process was mostly treated as automatic by both Latoski and JSCN. JSCN would make an offer in May and follow up with the contract. When this didn’t happen, Latoski continued her employment the following school year.

This was inconsistent with JSCN’s insistence it could only employ teachers on a year-to-year basis, said the adjudicator.

“Had the fixed-term nature of the contracts been of such importance to JSCN, one would expect that more attention would have been paid to presenting, signing and retaining the contracts,” said the adjudicator. “The relaxed approach taken by the parties tends to support my conclusion that the contracts were more of a formality than a necessity.”

And JSCN’s provision of a pension and benefits, and allowing Latoski to live on JSCN land, was more consistent with a permanent employment relationship.

Latoski was an indefinite-term employee entitled to severance, found the adjudicator. While each of her contracts was fixed-term, the cumulative effect of 27 years of employment along with the other factors made the employment relationship more permanent.

The inspector’s decision was overturned and JSCN was ordered to pay Latoski two days’ wages for each year of her employment as required under the code — a total of $9,838.24. See Latoski and James Smith Cree Nation, Re, 2016 CarswellNat 5276 (Can. Labour Code Adj.).

Jeffrey R. Smith is the editor of Canadian Employment Law Today. For more information, visit www.employmentlawtoday.com.

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