The Ontario Court of Appeal considered this issue in Foreman v 818329 Ontario Limited, a decision made in September of 2003. ¹ John Kirby was a lawyer who held a 50% interest in two companies which operated bingo halls in Stratford and St. Thomas, Ontario.

Anne Marie Foreman was hired by Kirby in February of 1989 to manage the bingo hall in Stratford. Ms. Foreman and Mr. Kirby were romantically involved at this time. Ms. Foreman was successful in her employment and by April of 1990 she was the full-time manager of both locations. She was then a common law employee.

Ms. Foreman learned of a buyer who had proposed to buy Kirby’s shares in the two companies. This buyer was a known competitor who was known by reputation to be prone to replacing employees with family and friends. The plaintiff requested a contract to secure her position. The proposed buyer so agreed and to that end, Kirby prepared a contract on behalf of Foreman, the termination provision in which read as follows:

2. Anne Marie is an employee of 818329 and Suhan in the capacity of hall manager. Her duties include the day-to-day management of 818329's hall in St. Thomas and the supervision of Suhan's hall in Stratford. She is paid a total of $640.00 per week, is entitled to the exclusive use of the apartment located at the St. Thomas Hall, and is entitled to sell lottery tickets at the St. Thomas hall for her own benefit. Her salary is reviewed annually on March 1st.
3. 818329 and Suhan shall not dismiss Anne Marie.

Counsel for the buyer requested an amendment to the termination paragraph by adding the words “except for cause”. The amendment was declined and the contract was signed in the form as proposed.

Nine months later, Foreman was fired. The judge at trial found that the plaintiff was entitled to damages for life. An award was made of $712,000. The trial judge found a contract for life and that the parties had agreed to contract out of the 9 year maximum period as set out in the Employers and Employees Act. ²

Needless to say, the employer appealed. The Court of Appeal acknowledged that it was possible to enter into a fixed term contract for life. As reasonably expected, the Court stated that such a contract required precision and clarity. The plaintiff herself had testified that the contract was intended to protect her from arbitrary removal and not to provide employment for the rest of her life. It was noted that the contract was drafted by Kirby for the plaintiff and hence any ambiguity would be read against her interests.

The Court accordingly saw this as a contract of indefinite duration, subject to reasonable notice. Ironically, the prohibition against termination added nothing to the cause of the plaintiff. The notice period set at 12 months was not influenced by the words in the agreement. ³ Damages were assessed at $30,800. A dissenting view was offered by Justice Armstrong, who nonetheless would have reduced the damage sum to $192,000.