Fixed-Term Employment: Manage the Risks and Respect Your Employees

Some employment relationships are short term or temporary by necessity, such as when an employee is hired to complete a discrete project or fill a maternity leave position. In these situations, the parties will often sign a contract that sets out how long the employment will last and when exactly it will end. We call such agreements fixed-term contracts.

One benefit to employers of a fixed-term contract is that when the employment ends on the date specified (subject to the cautions set out below), the employee is not entitled to reasonable notice or severance. However, there are also potential risks to using fixed-term employment contracts in your business.

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The Challenge of Terminating for Cause: Stock v. Oak Bay Marina Ltd.

What’s the difference between a termination with cause and without? Most people seem to have a good idea, and recognize that a termination with cause is rooted in employee misconduct. If it has been discovered that an employee has been stealing, lying or committing other forms of misconduct, the employer may be able to argue that the employee has fundamentally breached the employment agreement and that the employer is therefore entitled to put an end to the arrangement without any compensation or severance pay.

Or so the thinking goes… What many workers and employers may not recognize is that terminating someone for “just cause” can be remarkably challenging, as one company recently discovered in the recent BC Supreme Court decision Stock v. Oak Bay Marina Ltd., 2017 BCSC 359.

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