Two recent decisions of the Ontario Courts (in Dufault
and Kopyl)1 serve as stark reminders that:
- Our courts continue to be ready and willing to find new ways to
strike down termination clauses in employment contracts; and
- The use of "fixed term" employment agreements is very
risky.
In each case, the employee was employed pursuant to the terms of
a written contract with a "fixed term", or end date. And
in both cases, the contract contained a termination clause,
permitting the employer to terminate employment prior to expiry of
the contract, with only a specified, limited amount of notice or
termination pay.
The employer, in each case, terminated employment and paid the
employee the amounts required by the early termination clause. In
each case, the employee then sued for wrongful dismissal, asserting
that the termination clause in their contract was not binding.
