Employee agreed to new position but didn't start until he signed new contract
The Ontario Superior Court of Justice has upheld an employment contract after a dismissed worker challenged it by saying the contract came after he had started the new position.
Michael Gibbons, 36, was a technical events specialist for BB Blanc, a Toronto-based company providing event management, audiovisual and entertainment services. BB Blanc hired Gibbons in May 2011 and one year later asked him if he would be interested in a promotion to the position of assistant manager, operations and technical events, that would include an increase in his salary.
Gibbons indicated that he was interested in the promotion and the company drew up a new employment contract for the position, giving it to Gibbons on May 30, 2012. The contract included a termination clause that stated if Gibbons was terminated without cause he would receive working notice or pay in lieu of notice “in accordance with the Employment Standards Act, 2000." The clause included a chart showing the number of years of service with the corresponding notice period required.
Gibbons signed the contract on June 4, 2012.
On March 19, 2013, BB Blanc informed Gibbons that his employment was being terminated effective immediately. The company told him that his termination was due to a corporate restructuring and provided him with two weeks’ pay in lieu of notice up to April 2.
Gibbons sued for wrongful dismissal, arguing that the employment contract and its termination clause weren’t enforceable because the contract was signed after he had already accepted the promotion to the new position and it didn’t include new consideration for him agreeing to it.
The court found that the conversation between Gibbons and BB Blanc about the promotion wasn’t an actual job offer, but “merely an inquiry by the manager as to whether (Gibbons) would be interested in a new position which had been created by the (company) and not an acceptance of the employment contract.” Once Gibbons indicated his interest, the company gave him a job description so he would know exactly what the position would entail, said the court.
When BB Blanc provided a job description, it also told Gibbons he would be getting an employment contract with all the details including the promotion, salary increase, start date, and termination clause. Then, when the company gave Gibbons the employment contract, he took five days until he signed it. Given that Gibbons had the contract for this amount of time before he signed it — and the fact that he was university-educated — the court found he was sophisticated enough and had enough time to understand what he was signing. In addition, there was ample opportunity for him to ask questions about it and seek legal advice.
The court found everything indicated that Gibbons’ new job duties and salary all started on the start date shown in the employment contract and not before, as Gibbons claimed. As a result, the promotion and new salary constituted consideration for signing the new employment contract and no other consideration was necessary to make it valid, said the court.
“I conclude that both the contract and the termination clause are enforceable and the notice given to (Gibbons) on termination is in accordance with the termination clause,” said the court. “Consequently, (Gibbons) is not entitled to any further notice or payment in lieu of notice as a result of the termination of his employment by (BB Blanc).”
The court noted that had the termination clause not been valid, Gibbons would have been entitled to between two and three months’ notice, due to the fact he worked for BB Blanc for 22 months, was relatively young, and was able to secure other employment fairly easily — Gibbons found another job on the last day of his two-week notice period from BB Blanc.
