The case of Dwyer v. Advanis, found here, details the importance of properly drafted employment contracts and why employers should not use “boiler plate” contracts or re-use or modify older employment law contracts.  This case also deals with minimum notice provisions in employment contracts. The Plaintiff was hired in sales in April of 2004. He signed an employment law contract that noted a termination provision “if there was not a good fit between [the Plaintiff’s] skills and the requirements of the job”.  At that time Mr. Dwyer had no history with the company.  From 2004 to early 2006 the Defendant did have concerns about the Plaintiff’s “skills” in sales.  However, it modified his job responsibilities in the Spring of 2006 to provide a better fit to his skills.  He was promoted from sales to “Chief Marketing Officer.”  A letter dated September 7, 2006 detailed his new salary. It then represented to the government and to company personnel that the Plaintiff was a valuable member of its management team and a key player in the company’s future.  He was fired in November of 2007 “because his skills were unsuited to his redefined employment responsibilities”. At the same time he was told he was terminated because the company had lost close to a million dollars that year. Was it skills or finances?

On it’s own wording the clause is inapplicable. In terminating the Plaintiff, the Defendant Advanis relied on an express provision in the older employment contract that should it be determined at any time that there is not a fit between the Plaintiff’s skills and the requirements of the job, his employment with Advanis would be terminated and he would receive severance as determined by the applicable provincial Employment Standards Act.  Judge Aston noted that in the 2006 promotion letter, there was no provision relating to termination of the Plaintiff’s employment.  The Judge also noted that in the context of changing the Plaintiff’s job description and a letter detailing his new terms of employment and compensation, the wording of the original employment contract became inappropriate.  It was no longer appropriate to relate “a fit between your skills and the requirements of the job” to the new job specifically designed to provide employment responsibilities tailored to the demonstrated job skills of Mr. Dwyer.  The judge noted that although an original contractual provision for termination can continue or survive other changes to the employment contract, in some cases as a matter of law, the facts of this case lead him to conclude that the original provision was no longer part of the mutual understanding of the parties after the Plaintiff assumed the new role of Executive Vice-President, Sales and Marketing in 2006. In short, he was fired because of company finances, not his skill set.

In addition, with respect to the termination, the Judge noted that the clause is at least ambiguous as to whether it limits the Plaintiff’s entitlement to “the applicable Employment Standards Act” and nothing more.  He noted that any ambiguity should be construed against the Defendant as the author of the document, particularly given the disparity in the bargaining position of the parties.

Finally, under s. 57 of the Employment Standards Act, the Plaintiff was entitled to four weeks notice of termination and under s. 60 of that Act the Defendant was required to maintain his employee benefits during that period.  It did not do so.  The Defendant should not be afforded the protection of a contractual provision it breached itself.

You can see how it is important to not only have employment agreements drafted that are suitable to each hire, but if there is a promotion or extension – you should never rely on the old agreement. Never rely on boiler plate agreements…more importantly, when you change an agreement, ensure that there is proper consideration given. The best thing to do is a complete effective re-draft instead of providing amended agreements. Don’t rely on original provisions or original contracts when you  promote an employee.

If you have any questions please call Matt Lalande at 905.639.8894