The Law of Work
  • Home
  • About
  • Professor David Doorey
  • Osgoode Hall LLM
  • Books
  • Guest Contributors
  • Useful Links
    • Archive
  • Home
  • About
  • Professor David Doorey
  • Osgoode Hall LLM
  • Books
  • Guest Contributors
  • Useful Links
    • Archive
The Law of Work
Law of Work Archive

Changing Terms of a Fixed-Term Employment Contract Without Employee Consent Proves Costly to Employer

by David Doorey May 17, 2012
written by David Doorey May 17, 2012

I still meet HR professionals who believe that the employer can simply change employment contract terms unilaterally, without the employee’s agreement.  They cannot, as we have discussed here various times before (i.e. see here)
The latest case to reinterate this point is Loyst v.  Chatten’s Better Hearing Service, released last week by the Ontario Superior Court.
Basic Facts
In a small workplace, the relationship between the Owner and the Office Manager began to sour. The Owner informed the Office Manager that, moving forward, she would no longer be the Office Manager, and instead would be an accountant.  Moreover, she would no longer be entitled to attend business trips, which had been a standard perk for many years, and she would no longer be eligible for bonuses.  The Owner also said that he would not abide by an agreement to offer the employee a 15% share in the company after 5 years.
The Office Manager made it clear that she did not accept any of those changes.  The Owner responded by telling her to pack her stuff and leave, which she did.  The company asserted various positions in its defence to the lawsuit:  (1) that the employee quit; (2) that the employer had just cause due to the Office Managers’ poor management style; and (3) that information obtained after her termination about a conversation the Office Manager had with a client (complaining about the Owner) constituted just cause.
Issue: Was the Office Manager wrongfully dismissed?
Court’s Reasoning
The Employee was wrongfully dismissed.  She did not quit, because a quit must be “clear and unequivocal” and, “To be clear and unequivocal, the resignation must objectively reflect an intention to resign, or conduct evidencing such an intention”.  Here, there was no such clear intention to resign expressed in the facts.
This was a case, like the well-known decision in Wronko v. Western Inventory, in which the employer attempted to unilaterally amend fundamental terms of the employment contract and was met by a non-agreeable employee.  The Court of Appeal in Wronko made clear that an employer faced with a refusal by the employee to agree to an amendment of contract terms must either leave the contract untouched, or it must terminate the contract as a whole by giving the legally required amount of notice, and then renegotiate a new contract.  Here, the employer simply told the employee that if she doesn’t like the revised terms, she can leave.  That amounts to a fundamental breach of the employment contract, and a wrongful dismissal.
The Court allowed in the evidence about the alleged conversation between the employee and a client, even though the employer was not aware of this conversation at the time it dismissed the employee.  This is consistent with earlier rulings finding that employers can rely on new evidence obtained after the dismissal to argue just cause.  But here, the Court found that the conversation was just the normal grumblings of an employee and not grounds of dismissal without notice.
Remedy
Since the employee had  a 5 year employment term contract, she was entitled to all wages for the remainder of the 5 year period, which had about 30 months left on it, plus GST, from which was deducted monies she already received for termination pay and income she earned from other sources since her termination.  She was also entitled to receive the value of 15% of the company, which amounted to $180, 000.

Issue for Discussion

The Owner here claimed that the Office Manager’s attitude posed a threat to business relations and therefore that she should not be interacting with clients.  So he tried to introduce changes to keep her away from clients. This strategy did not work out very well for the employer.
Is there anything the Employer could have done differently to achieve its goal of keeping an employee away from clients when the employee would not agree to that arrangement?

0 comment
0
FacebookTwitterLinkedinEmail
David Doorey

Professor Doorey is an Associate Professor of Work Law and Industrial Relations at York University. He is Academic Director of Osgoode Hall Law School’s executive LLM Program in Labour and Employment Law and a Senior Research Associate at Harvard Law School’s Labor and Worklife Program. Professor Doorey is a graduate of Osgoode Hall Law School (LL.B., Ph.D), London School of Economics (LLM Labour Law), and the University of Toronto (B.A., M.I.R.).

Leave a Comment Cancel Reply

You must be logged in to post a comment.

previous post
When Does Winning an ESA Complaint Bar an Employee from Bringing a Human Rights Complaint?
next post
Supreme Court Reviews Division of Powers in Labour & Employment Law

You may also like

This Blog Entry is About the Lunacy of...

July 21, 2019

A Cross Country Update on the Card-Check versus...

October 3, 2018

The Folly of Not Voting to Strike in...

September 16, 2018

Unifor Posts Photos of Replacement Workers as Gander...

September 10, 2018

A Wrongful Dismissal Case and the Absence of...

August 29, 2018

China Said to Quickly Withdraw Approval for New...

August 27, 2018

The Latest Hot E-Commerce Idea in China: The...

August 27, 2018

The Trump Administration Just Did Something Unambiguously Good...

August 27, 2018

Unstable Situations Require Police In Riot Gear Face...

August 27, 2018

Trump’s War on the Justice System Threatens to...

August 27, 2018

Follow Us On Social Media

Twitter

Latest Tweets

David J. Doorey🇨🇦 @TheLawofWork@mas.to Follow

Law Prof. Talking #labor & #employment #law to the masses. @YorkUniversity @OsgoodeNews @LSELaw @CLJEHarvard @Jacobin @OnLaborBlog https://t.co/5V9r8VPHsh

TheLawofWork
thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
1h

Name an institution that respects freedom of expression more than universities.

Chanel Pfahl 🇨🇦 @ChanLPfa

“A @PierrePoilievre government will not only repeal the censorship bill C-11, but we will require every university that gets federal funds to commit itself to honouring the freedom of expression that we are guaranteed in our Charter of Rights.” #CSFN23 https://twitter.com/i/web/status/1639053857836679168

Reply on Twitter 1639141695983067137 Retweet on Twitter 1639141695983067137 1 Like on Twitter 1639141695983067137 6 Twitter 1639141695983067137
thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
3h

Got me some pretty fine tickets to the @Canucks v @SanJoseSharks.

Reply on Twitter 1639110564260765696 Retweet on Twitter 1639110564260765696 Like on Twitter 1639110564260765696 4 Twitter 1639110564260765696
thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
10h

The Hall and Oates defence is a classic. Even if it failed.

ryan white @ryandwhite12

@TheLawofWork My response to posts like this is always to go back to an old Slotnick decision from 2002 in which a TTC employee tried to get reinstated by arguing he didn't threat a supervisor, he was just singing Hall and Oates man...

Reply on Twitter 1639003611433762818 Retweet on Twitter 1639003611433762818 1 Like on Twitter 1639003611433762818 1 Twitter 1639003611433762818
Load More

Categories

  • Alberta
  • Artificial Intelligence
  • Australia
  • British Columbia
  • Charter of Rights and Freedoms
  • Childcare
  • Class Action
  • Climate and Just Transition
  • Collective Bargaining
  • Common Law of Employment
  • Comparative Work Law
  • competition law
  • construction
  • COVID-19
  • Diversity
  • Employee Classification
  • Employment Insurance
  • Employment Regulation
  • Europe
  • Financial Industry
  • Fissured Work
  • Freedom of Association
  • frustration of contract
  • Gig Work
  • Health and Safety
  • Health Care
  • Human Rights
  • Immigration
  • Interest Arbitration
  • International Law
  • Labour Arbitration
  • Labour Economics
  • Law of Work Archive
  • Legal Profession
  • Manitoba
  • Migrant Workers
  • Minimum Wage
  • Newfoundland
  • Nova Scotia
  • OLRB
  • Ontario
  • Pension Bankruptcy
  • Privacy
  • Public Sector
  • Quebec
  • Real Life Pleadings
  • Saskatchewan
  • Scholarship
  • Sports Labour
  • Strikes and Lockouts
  • Student Post
  • Supreme Court of Canada
  • technology
  • Transnational Law
  • Uncategorized
  • Unions and Collective Bargaining
  • United States
  • Videos
  • Women and Work
  • Wrongful Dismissal
  • Home
  • About
  • Guest Contributors
Menu
  • Home
  • About
  • Guest Contributors
  • Legal Scholarship
  • Useful Links
  • Archive
Menu
  • Legal Scholarship
  • Useful Links
  • Archive

2020. Canadian Law of Work Forum. All Rights Reserved.