April 2016

In the recent case of Bhasin v. Hrynew the Supreme Court of Canada established a new duty of good faith that applies to all contracts, including employment contracts. This duty requires the parties to be honest with each other in regards to the performance of their contractual obligations. The court held that, while performing the contract, each party should have an “appropriate regard” to the legitimate interests of the other party. Further, the parties may not act in a manner which is arbitrary or capricious. This duty of good-faith dealing has been subsequently applied to the employment-dismissal context in Styles v. Alberta Investment…

In a series of cases the Court of Quebec looked at the question of an employer’s justification of termination for “serious reasons’ and held that an employer’s legitimate business reasons are not the same as “serious reasons” at law. The two cases Corporatek Inc. v. Khouzham and Premier Tech Ltée v. Dollo stand for the principle that, in non-disciplinary cases, prior to terminating employment for a “serious reason,” an employer must first notify the employee of the risk of termination, explain the reasons for the decision, and allow the employee to address their shortcomings. This applies even if the employee…

The recent decision of Michela v. St. Thomas of Villanova Catholic School reaffirms that employers have an obligation to provide reasonable notice to employees, regardless of the employer’s financial circumstances. This obligation is not reduced when the employer faces financial hardship and, as such, economic hardship is not relevant to calculating the length of the reasonable notice period. The case was brought by a number of long-tenured teachers, who were notified of their termination at the end of a school year, due to apparent financial difficulties that the school was facing. The court affirmed that the length of a reasonable…

In the recent case of Holland v. Hostopia.com Inc. the Court of Appeal for Ontario ruled that fresh consideration will be needed in order to enforce employment contracts signed mid-employment that introduce new material terms. Such situations often arise in cases like the one of Mr. Holland who, after several months of working with Hostopia, was presented with a new employment agreement that contained a new termination clause. This clause was not present in the initial agreement he signed when offered the position with the company. Several years later the employer relied on this clause to terminate Mr. Holland’s employment on a…