In the recent decision of Lefebvre v Gisborne Holdings Ltd., 2023 BCSC 2231, the BC Supreme Court (The Court) found that Gisborne Holdings Ltd. (the Employer) did not have cause to dismiss a fixed-term contract employee and awarded $81,100 CAD in damages.
Ms. Lefebvre, the dismissed employee, was hired under a fixed-term contract to replace an employee on parental leave. Six weeks into the contract, the Employer terminated Ms. Lefebvre's employment, for cause, in response to an email she sent to a HR manager. Ms. Lefebvre sent the relevant email following a meeting she had with HR and her supervisor to discuss performance and communication issues; including a prior incident where Ms. Lefebvre was "testy" with a client. The email contained critiques of Ms. Lefebvre's supervisor and an allegation that the supervisor engaged in "at best, a deliberate misdirection" while addressing Ms. Lefebvre's behaviour.
The Employer argued:
- That Ms. Lefebvre was terminated for cause; and
- In the alternative, if she was not dismissed for cause, that the Employer was entitled under the employment contract to terminate her employment prior to the end of the fixed-term.
The Court disagreed.
The Court found that while the email was "direct and strongly worded" it did not amount to insubordination and thus summary dismissal was not appropriate in the circumstances. A consideration in the Court's decision was the fact that the Employer had, but did not follow, a written progressive discipline policy. The Court further found that the fixed-term contract did not provide for early termination, rejecting the Employer's argument that a "Completion Bonus" clause authorized termination without cause. The Court also addressed mitigation. Despite an acknowledgement of current uncertainty in the law as to whether a duty to mitigate is owed by an employee with a fixed-term employment contract, the Court went on to conclude that Ms. Lefebvre had taken reasonable steps to find alternate employment. Her efforts included registering with an employment website, applying for jobs, and attending interviews.
Ultimately, the Court awarded damages in the amount Ms. Lefebvre would have been entitled to had she completed her full term of employment i.e. four and half months wages to an employee with six weeks of service ($81,100 CAD).
Key Takeaways
Fixed-Term Contracts: Courts are generally unwilling to "read in" terms to a contract. We recommend careful consideration before entering into fixed-term contracts and always ensuring that a fixed-term contract contains language that allows for early termination.
Just Cause: Employers bear the heavy burden of proving just cause. The conduct must be so severe that it is "seriously incompatible with the employee's duties". Employers are also required to consider the suitability of alternative disciplinary measures to dismissal. Before dismissing anyone, particularly for just cause, we recommend speaking with a member of our team to understand the risks involved.
Mitigation: While the law in BC is currently unclear regarding whether there is a duty to mitigate in the context of fixed-term contracts, this case suggests that a mitigation analysis may be undertaken in any event. The burden of proving that an employee has failed to mitigate again rests with the employer.
Fixed-term contracts and for cause dismissals can create major liabilities for employers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
