Law Times

Law Times • may 8, 2017 Page 7 www.lawtimesnews.com Perilous fixed-term contracts BY NIKOLAY Y. CHSHERBININ I n the domain of employment law, a fun- damental common law principle is that a contract of employment for an indefi- nite period is terminable only if reason- able notice is given. This principle does not apply to fixed- term contracts. At the conclusion of a fixed-term contract, employees are not dis- missed; rather, their employment ceases in accordance with the terms of the contract. A subtle legal question of whether an employee forfeits their entitlements under a fixed-term contract arises when their employment continues beyond the con- tractual expiry date. In Roberts v. ZoomerMedia Limited, 2017 ONCA 324, the Ontario Court of Appeal upheld the lower court's decision that, inter alia, concluded that continua- tion of employment under a common law regime does not discharge an employer's obligation under a fixed-term contract. The court also rejected the employer's ar- gument that the termination clause was void for contravening the Employment Standards Act, 2000. In Roberts, Bill Roberts served as the president and CEO of a charity, S-Vox Trust, which owned and operated a spe- ciality television station called Vision TV. In 2007, Roberts signed an employment agreement with S-Vox for a fixed term, ending on Oct. 31, 2011. The agreement provided that on the expiry of its term, Roberts would be entitled to a lump-sum severance payment, equivalent to a two- year salary and a six-month paid sabbatical leave. On June 11, 2009, the employment agreement was amended, but Roberts' en- titlements remained intact. On June 15, 2009, ZoomerMedia entered into an agreement to purchase the Vision TV business. In the Vision TV purchase agreement, ZoomerMedia agreed to an assignment of Roberts' employment agree- ment and to continue his em- ployment "on terms which will be no less favourable." As the expiry of Roberts' employment agreement drew near, there were frequent, but unsuccess- ful, attempts to renegotiate it. On Oct. 31, 2011, Roberts' employment agreement expired, but his employment with ZoomerMedia contin- ued after that date as a common law rela- tionship. On March 1, 2012, ZoomerMedia gave notice that it was terminating Roberts' em- ployment effective Oct. 31, 2012. Zoomer- Media took the position that the common law relationship discharged Roberts' enti- tlements under the employment agreement and provided him with an eight-month working notice and a two-month severance package. Roberts disagreed and launched a wrongful dismissal action against Zoomer- Media. His action was adjudicated by way of a summary judgment motion, where Jus- tice Paul Perell found ZoomerMedia liable to pay $640,000 in damages for the two- year severance payment ($490,000) and for payment in lieu of the sabbatical ($150,000). In coming to his decision, Perell ex- plained that when, on Oct. 31, 2011, Rob- erts' employment agreement ended, his contractual entitlements crystalized. Hav- ing found that there was no novation, Per- ell concluded that, after Oct. 31, 2011, the common law gov- erned the parties' post-expiry relationship, but it did not dis- charge ZoomerMedia of its ob- ligations, which it assumed un- der the fixed-term agreement. On appeal, ZoomerMedia argued Perell erred by not giv- ing effect to its argument that the clause — contained within the broad termination provi- sion — that provides entitle- ments in the event of early ter- mination without cause is void because it contravenes s. 61(1) of the ESA by expressly excluding entitlement to short- term and long-term disability during the statutory notice period. Effectively, ZoomerMedia argued that because it did not agree to provide Roberts with all of his statutory entitlements, the termination provision must be invalid in its entirety and Roberts must forfeit his entitle- ment to the contractual two-year severance payment, valued at $490,000. The ONCA rejected ZoomerMedia's argument because, in its view, it would be a perverse application of the ESA, which is designed to protect the interests of employ- ees. Next, ZoomerMedia argued that Perell erred in not finding that Roberts waived his entitlement to a sabbatical because, over the course of the pre-existing negotiations to extend Roberts' employment agreement, the parties purportedly reached an agree- ment that he would forgo his entitlement to the sabbatical. The ONCA rejected this argument, stating that Roberts may have been will- ing, in the course of negotiations, toward a new employment contract to forgo his sabbatical, but ZoomerMedia cannot con- vert a provisional bargaining position into a valid waiver. On this issue, Perell opined that Roberts was a testimonial to the virtue of the parol evidence. The pivotal point in this case centres on the effect of the fixed-term agreement on the calculation of Roberts' entitlements. Despite the fact that the term underlying the fixed agreement expired and the par- ties continued with their employment rela- tionship beyond the expiry date, they were still bound by that agreement. However, because the parties did not agree to a new term or any new provisions, the key provisions, such as the position and compensation, remained the same. Be- cause there has been no consensus between the parties as to what the term may be go- ing forward, it became a term of indefinite hire, subject to dismissal on reasonable notice. Fixed-term contracts of employment are legal, and where their terms are clear, they will be enforced. The courts require unequivocal and explicit language to establish such a contract, and they will interpret any ambiguity, as Roberts il- lustrates, strictly against employers' inter- ests. Where the parties to an employment agreement fix the entitlements upon ter- mination, those entitlements are treated as a contractual entitlement for which miti- gation is not required. LT uNikolay Chsherbinin is an employment and immigration lawyer and author of The Law of Inducement in Canadian Employment Law. He can be reached at 416-907-2587 or by visiting nclaw.ca. The Charter, the great protector BY HASSAN M. AHMAD J ustice Ian Nordheimer's recent decision in Ali v. Canada (Attorney General), 2017 ONSC 2660 underlines the centrality of the Charter of Rights and Freedoms in protecting under- privileged and marginalized members of our society. The Charter turns 35 years old this year, and while its history has not been without controversy, in both pol- itical and legal circles, Ali demonstrates the Charter's continued ability to inf luence our jurisprudence. Kashif Ali had lived in Canada for approximately 30 years without legal status. As a result of his crimin- al history, the Canadian government sought to deport him. However, the government couldn't ascertain his country of origin, so Ali was instead held in detention for approximately seven years. Part of his detention was spent in solitary confinement. Ali brought an application for habeas corpus to the Superior Court of Justice, arguing that the detention violated his Charter rights. Prior to the Superior Court accepting its exceptional jurisdiction to hear a habeas petition, the federal Immigration and Refugee Board had concluded on numerous occasions that Ali's deten- tion was appropriate in the circumstances. The board said Ali was "actively hampering the Minister's effort" to obtain information as to his home country. In his decision released April 28, Nordheimer relied upon the Court of Appeal's decision in Chaudhary v. Canada (Public Safety and Emergency Preparedness), 2015 ONCA 700, wherein the court stated that "[w]here there is no reasonable prospect that the detention's immigra- tion-related purposes will be achieved within a reason- able time . . . a continued detention will violate the de- tainee's [s.] 7 and 9 Charter rights and no longer be legal." In Ali, the court held that the length and uncertainty of Ali's seven-year detention contravened the Charter's liberty and arbitrary detention provisions under ss. 7 and 9. According to Nordheimer, there was no reason- able prospect that information or documentation would arise in a reasonable amount of time, thereby permitting the government to deport Ali. As such, Nordheimer or- dered Ali to be released from detention with terms and conditions. It is impossible to say whether the Charter is the reason why Ali was released. Before the Charter was enshrined into the Consti- tution, the common law and Bill of Rights attempted to protect individuals against arbitrary detention and the deprivation of liberty. However, the Bill of Rights holds the same legal status as any other legislation and the common law evolves and sometimes even changes completely with the stroke of a judge's pen. Conversely, the Charter provides a consistent yard- stick by which to review governmental action. As a result of the past 35 years of case law interpreting the Charter's succinct text — and especially those cases that have reached the Supreme Court of Canada — politicians are cognizant of the Charter when drafting legislation for fear that a provision will not withstand its constitutional guarantees. With the above in mind, the Charter's greatest leg- acy may not be legal but rather psychological. Since its inception, the Charter has entrenched the language of human rights in the Canadian psyche in a way that did not exist prior to 1982. At times, it has been the catalyst in triggering discussion in the broader Canadian society on monumental topics such as religious accommodation, abortion, criminal sentencing and, most recently, the right to physician-assisted suicide. The Charter has moved the discussion of individual rights from the sole purview of the legislative branch to the judiciary, at least in part. Therefore, those individuals or groups affected by a governmental actor can directly bring a Charter chal- lenge before the courts rather than risk their fate in the hands of politicians who may be tied to special in- terests. In that regard, Ali's plea for freedom may have never been heard if left to political will. Surely, he holds little, if any, sway over any mem- ber of Parliament as he does not have the ability to vote and, as such, would not have garnered any real attention from elected officials. Also, Ali does not have the notori- ety or inf luential connections that others have possessed in the past in order to lobby the Canadian government for a release from detention. While he may have had limited political inf luence and no legal status in Canada, Ali's legal rights remained intact under the Charter. This is the Charter's legacy — the ability to help the hapless. Some may recall that the Harper administration did not explicitly extol the Charter, perhaps in part due to the document's historical tie with the Liberal govern- ment of Pierre Trudeau. It was not long ago that the federal Conservatives ignored the Charter's 30 th anni- versary, much to the chagrin of advocates and activists. The Harper administration incurred its share of defeats at the hands of the Charter. Its goals of expanding man- datory minimum sentences and forcing women to re- move face veils at citizenship ceremonies did not pass the Charter's legal tests. The lesson that abides from that recent past is that governments are temporary and only one election away from losing their legislative power. While policies might differ from one administration to the next, what distin- guishes our society from an ochlocracy or even dicta- torship is the strict adherence to the rule of law. This adherence necessitates the presence of robust Constitution-based rights that protect the powerful and powerless all at once. Over the past 35 years, the Charter has provided this rights framework independ- ent of the prevailing political tide. Ali is simply its latest expression. Thankfully, there will be many more. LT uHassan M. Ahmad is a litigation lawyer with Loopstra Nixon LLP in Toronto. u SPEAKER'S CORNER COMMENT Labour Pains Nikolay Chsherbinin

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