Labor & Employment Law

Sanctity of Contract in Employment Cases

By Michael Fitzgibbon

Mr. Justice Little of the Ontario Superior Court of Justice started off his recent judgment in Van Mensel and Walpole Island First Nation with the following words:

The sanctity of contract law has eroded over the last century, particularly in the field of employment law.  Fairness in contracting has caused courts to seek out possible contract ambiguities in the employment contract so as to impose equity.  However, contract law does remain a cornerstone of the common law.

If you're the defendant and read those words at the start of the judgment, you're about to have a good day.

The plaintiff, for a period of 11 years and through a series of fixed term independent contractor agreements, had provided computer training to students of Walpole Island First Nation until, in 2008, her contract was not renewed and the job became permanent and was put out to tender.  

In terms of the process for the entering into of each successive fixed-term contract, the Court noted:

Each contract ran from September of one year to June of the next year being the school term.  Each year she prepared a proposal which incorporated a fixed term.  The terms of the proposal were negotiated but the fixed term remained.  After negotiations, the proposal was approved by the defendant or one of its entities.

The plaintiff sued claiming a la Ceccol, that she was an indefinite term employee and was entitled to reasonable notice of termination at common law.  

In Mensel the Court founds that the contracts were clear and unambiguous and that "no opening is provided to the court to ?interpret? the contract in a manner more favourable to the plaintiff".  The contract was for the school year only (that's it), the plaintiff was "uncertain that her contract would be renewed annually" and the Court was prepared to give effect to the contract and the expectations of the contracting parties.  The plaintiff was found to be an independent contract subject to fixed term contracts lasting for the school year.  The claim was dismissed.

The case is refreshing and confirms that where the contract is carefully and properly drafted and the underlying facts are present, the court will give effect to the clear words of the parties. 

Full post as published by Thoughts from a Management Lawyer on November 30, 2010 (boomark / email).