Severance entitlement for student on short contract
Question: If a summer student is hired on a contract a few months long but isn’t working out, are there any notice or severance obligations if the employer wants to terminate the student’s employment? Can the contract include a provision allowing termination without severance since the term is so short?
Answer: As we all know, the general rule is that unless there is just cause for dismissal, an employer must provide notice of dismissal or pay in lieu thereof. However, that is not the case if the contract is for a fixed term. If, for example, a contract is to commence on July 1 and end on Aug. 31, then once that term has expired, the employer has no further obligation to the employee. There is no need to provide notice or severance.
That said, it is crucial that the contract clearly be for a fixed term. If the contract is in writing, it may be a binding agreement and not one signed, for example, when the employee arrives for their first day of work and already has a verbal agreement in place. If there is a verbal agreement, it will be up to the party seeking to rely upon it to prove the terms thereof.
Employers also get into trouble when they continue to employ someone after their fixed-term contract ends. By doing so, they often unintentionally create a new contract of indefinite duration. In those circumstances, the usual notice/pay obligations will apply.
