Unjust Dismissal Under Canada Labour Code


Fixed Term Contract

One issue that has arisen is whether the existence of a fixed term contract and its natural conclusion by the passing of time, gives rise to an argument of termination for this purpose.

Generally speaking, such a context is not seen as a termination. The terms “dismissed” or “dismissal” are not defined in the Code. Past cases have come to this conclusion. 1 2

Fixed Term Agreement Review

An issue may arise as to whether the agreement is truly a fixed term contract. Such a review will look to the intentions of the parties as may be determined by often circumstantial evidence. The principle that a fixed term contract is that and only that is not one cast in stone. 3

The Board in a decision reviewed persuasive factors as follows, not intended to be all inclusive: 4

  1.    the number of fixed-term contracts signed by the employees;
  2.    the degree of ambiguity of the contracts;
  3.    the specific wording of the contracts;
  4.    the intent of the parties, the signatory to the contracts and their understanding of the contracts;
  5.    the actions and behaviours of the employees and the employer relative to their employment relationship, including actions related to the administration of the contract;
  6.    the representations made by the employer’s officials to the contracted employees;
  7.    the representations made by the employees to the employer; and
  8.    the employment conditions the employees worked under, such as policies and procedures of the employer.

In the immediate case, the Board also saw the ambiguity of the contract and the specific wording employed as also relevant.

As in many cases looking to interpret the employment contract, the Board relied upon an Ontario Court of Appeal decision dealing with this issue: 5

It seems to me that a court should be particularly vigilant when an employee works for several years under a series of allegedly fixed-term contracts. Employers should not be able to evade the traditional protections of the ESA and the common law by resorting to the label of 'fixed-term contract' when the underlying reality of the employment relationship is something quite different, namely, continuous service by the employee for many years coupled with verbal representations and conduct on the part of the employer that clearly signal an indefinite-term relationship.

The same decision required that “unequivocal and explicit language” be seen to establish a fixed term contract.

In the immediate case in McKay, the Board found that the contract was indeed for a fixed period of time and that there had been no termination.

A Board decision in 2001 considered a contract which contained a defined term probationary period. The words in question read as follows:

Your probation period will run from December 27, 2018 through June 27, 2019. At the end of the probationary period a Performance Evaluation will take place.

As there were no words to suggest that the relationship would then necessarily end, the submission of a fixed term contract failed. 6

Resignation vs Termination

The case law has determined, similar to common law principles, that words spoken in haste or high emotion may not reflect the true intent of the employee. Generally, there must be some other conduct, when viewed objectively, reveals the true intent to resign. Examples of such actions include a lengthy unexplained absence, returning keys or other company property, clearing out personal possessions, requesting a final pay cheque or seeking other employment.

The review then includes a subjective intent to quit and an objective conduct which reveals this intent. 7