‘Substantial’ changes turn out to be inconsequential

Rasanen v. Lisle-Metrix Ltd. (2002), 17 C.C.E.L. (3d) 134 (Ont. S.C.J.)

The defendant hired the plaintiff, a 59-year-old professional engineer, in 1985 as a marketing and sales manager. The terms of employment included an annual salary of $45,000 plus bonus and benefits, and provided for one month’s notice of termination per year of employment to a maximum of six months, except if dismissed for cause. The plaintiff was dismissed with six months’ notice in 1994. Almost six years after his termination, the plaintiff commenced this action for damages for wrongful dismissal.

The plaintiff argued the notice provisions in the employment contract were no longer in effect at the date of termination because of substantial changes to or fundamental breaches of the employment contract by the employer.

After examining each of the contractual terms the plaintiff claimed the employer had unilaterally altered, the court held that none of these changes could be seen as significant or fundamental. The court concluded there had been no breach of any fundamental term of the contract and there had been no repudiation of the contract by the employer.

The only change which the court found was remotely consequential was the change to the employee’s bonus structure from a bonus of 0.5 per cent of company sales to a discretionary bonus. However, even this alteration to the employment contract was not significant enough to constitute a fundamental breach of contract.

Furthermore, even if this change was serious enough to be a fundamental breach, the court held that the plaintiff had condoned the change and therefore was not entitled to claim otherwise now.

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