Termination clause in employment contract not in effect since employment hadn't begun: Court
The recent British Columbia Supreme Court decision in DeGagne v. Williams Lake (City) reminds us that an employer's obligation to provide notice of termination can begin prior to an employee beginning to perform her employment duties.
After an interview with the City of Williams Lake, B.C., and the completion of reference checks, Donald DeGagne was offered the position of CAO with the city and signed a letter agreement which provided for the termination of DeGagne's employment during the six-month probationary period with one month's notice.
Prior to beginning his probationary period and the performance of his employment duties, the city decided to terminate DeGagne's employment without cause as a result of the content of an anonymous letter that was received about DeGagne and an email which DeGagne sent to the city's human resources manager. The city attempted to rely on the terms of the letter agreement with respect to DeGagne's probationary period and provided DeGagne with one month's notice. DeGagne initiated legal proceedings against the city for, among other things, the amount of notice to which he was entitled as a result of his termination without cause.
The court determined that the letter agreement was a binding contract between DeGagne and the city. However, given that DeGagne had not yet started to perform his employment duties, he was not yet in his probationary period, thereby preventing the city from being able to rely on the termination clause of one month. Accordingly, the court awarded DeGagne six months notice as a result of his age and prior years of experience as a local government administrator.
Lesson for employers
It is often thought that an employee is only entitled to notice upon termination if it she actually begun to perform her employment duties. However, the above decision demonstrates otherwise, therefore being of great importance and interest for employers. As a result, employers should ensure any exposure to notice in such a situation is limited.
Lessons for employees
Similarly, employees should be aware of the above decision as they may be entitled to notice when they otherwise may be under the impression that no notice is owed or that a termination clause restricts the amount of notice that they are entitled to receive. Accordingly, when being terminated, an employee should review her termination package to ensure she is being provided with her full entitlements.
For more information see:
· DeGagne v. Williams Lake (City), 2015 CarswellBC 1333 (B.C. S.C.).
Ronald S. Minken is a senior lawyer and mediator at Minken Employment Lawyers, an employment law boutique in Markham, Ont. He can be reached at www.MinkenEmploymentLawyers.ca. Ron gratefully acknowledges Sara Kauder and Kyle Burgis for their assistance in preparation of this article.