Termination provision stipulating 2 weeks' notice not binding: court
A Nova Scotia court has awarded two mostly seasonal workers 3.5 and three months’ pay in lieu of notice after they were fired with approximately five years of service, despite a termination provision stipulating two weeks’ notice entitlement.
The first worker, DSD, started working with the Annapolis Heritage Society (AHS) in Annapolis Royal, NS, in 2017 as an interpretive guide providing tours of the North Hill Museum in nearby Granville Ferry, NS, and assistance to the site supervisor. The second worker, DB, also joined AHS in 2017 as a site supervisor at the museum.
Both workers signed an offer of employment on June 2, 2020, that stated they would be paid on a biweekly basis and either they or AHS could terminate the employment agreement with two weeks’ written notice to the other party.
The workers worked 37.5 hours per week during the main season, which ran from June to September or October. During the off-season, they worked about three hours per week and were paid an hourly rate.
Termination of employment
The workers continued to work under the same contracts until June 17, 2022, when AHS terminated both of the workers’ employment without notice. The first worker was 51 years old and the second worker was 61.
The workers filed complaints with the Nova Scotia Labour Standards Division claiming reasonable notice, and the labour board found that they were titled to termination pay under the province’s Labour Standards Code. The board determined that the first worker was entitled to two weeks’ pay under the code code, as her period of employment was less than five years but more than two years. The second worker was entitled to four years’ pay, as her period of employment was five years, said the board.
The two workers took AHS to small claims court for common law pay in lieu of notice. AHS maintained that it was entitled to terminate their employment for just cause. However, this was contrary to the labour board’s findings and AHS eventually conceded that there was no cause for dismissal.
The court considered whether the termination clauses in the workers' contracts were binding. AHS argued that the contracts stipulated a two-week notice period for either party to terminate. However, the court found that the provision wasn’t enforceable, as termination clauses that don’t meet statutory minimum standards are null and void – as established in Machtinger v. HOJ Industries Ltd., 1992 CanLII 102 and Shore v. Ladner Downs, 1998 CanLII 5755.
While the two-week notice period didn’t violate labour standards at the time the contract was signed, it would over time if the workers’ service time with AHS increased, the court said.
Termination provisions not binding
The court also noted that the employment contracts specifically referenced the 2020 season, without clear terms on if they would apply upon renewal or “in perpetuity” in the case of ongoing employment. As a result, the terms were ambiguous and couldn’t rebut the presumption of common law entitlements, the court said.
After reviewing case law, the court determined that DB was entitled to a notice period of 3.5 months, while DSD was entitled to three months. The court considered factors such as the seasonal nature of their employment, their tenure, and the absence of specialized training required for their roles.
AHS was ordered to pay DB 3.5 months’ salary and vacation pay minus a deduction from the earlier labour standards award. With interest and costs, this totalled $8,209.97. The company was ordered to pay DSD three months’ salary and vacation pay, with deductions for the earlier labour standards award and mitigation earnings, for a total of $5,649.45 including interest and costs.
The court denied additional claims by the workers for reimbursement of service costs, citing a lack of supporting evidence.
