Beware the fixed-term employment contact. That should be every
employer's mantra following the recent decision of the Ontario
Superior Court in McGuinty v. 1845035 Ontario Inc.
(McGuinty Funeral Home), 2019 ONSC 4108
("McGuinty").
The McGuinty case has its roots in the sale of
a third-generation family-owned business. Specifically, the
Plaintiff in McGuinty had for many years owned and
successfully operated a funeral home in North Bay along with his
brother. After his brother fell ill, the Plaintiff elected to sell
the funeral home to a new owner. As part of that transaction, the
Plaintiff moved from owner to employee. He further entered into a
ten (10) year fixed-term "Transitional Consulting Services
Agreement" with the Defendant-purchaser, wherein he was
recognized as a "key employee" of the funeral home going
forward. The Plaintiff was paid an annual salary of $100,000.00 and
provided a variety of other benefits.
