A fixed-term contract is an employment agreement with a pre-determined end date. The law requires that the terms and conditions of a fixed-term contract be clearly and explicitly expressed in the contractual language used by the parties.
Generally, a fixed-term contract ends once the stipulated time period is met. If an employer terminates a fixed-term contract before the specified end date without cause, this constitutes a breach of contract. This generally entitles the employee to an award of damages equal to the renumeration that they would have received had the entire contractual term been carried out to the end of the term, unless the contract contains an enforceable early termination clause.
In McGuinty v. 184035 Ontario Inc. (McGuinty Funeral Home) (2020), the parties entered into a 10-year fixed-term contract without an early termination clause. A year after the contract was signed, there was a breakdown in the employment relationship between the parties resulting in the plaintiff’s silent termination. As a result, the Plaintiff pursued a constructive dismissal claim against his employer. The Ontario Court of Appeal upheld the trial judge’s determination that the Plaintiff had been constructively dismissed when the 10-year fixed term was prematurely terminated. The court granted damages to the Plaintiff, amounting to $1,274,173.83, covering the remainder of the 9-year term and encompassing salary, commissions, benefits and expenses.
If you have been terminated by your employer, whether on a fixed-term contract or indefinite contract, you can give our firm a call for a free consultation. Our experienced employment law team at Landy Marr Kats LLP can help you understand your legal rights and entitlements. We don’t charge fees unless we get you money.