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ARTICLE · 01 AUGUST 2023

Exploring Fixed Term Contracts: Legal Considerations For Employers

Fixed term contracts are intuitively appealing. If a business has funding for a three-year project, hiring someone to do that work on a three-year term seems logical.

CanadaEmployment and HR

Fixed term contracts are intuitively appealing. If a business has funding for a three-year project, hiring someone to do that work on a three-year term seems logical.

Yet, as the recent Court of Appeal decision in Monterosso v. Metro Freightliner Hamilton Inc. (Monterosso),1 underscores, hiring someone on a fixed term contract can carry significant risk.

The underlying facts of this case are straightforward. Metro Freightliner Hamilton Inc. engaged Monterosso as an independent contractor on a 72-month fixed term. Nine months into the six-year contract, the company terminated Monterosso's services without cause. Monterrosso successfully sued for payment of the remaining 65 months of the contract, which amounted to CA$552,500 plus HST.

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