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NATL61_056 03/08/2007 09:56 AM Page 56 Labour & Employment Law When a contract’s not a contract Can employers unilaterally amend executive employment contracts on notice? ubject to statutory constraints, such termination, if notice of termination is change the termination provision in his Sas those found in the Employment given to [him] at any fiscal year-end or at written employment contract by provid- Standards Act 2000, employers and employ- any other time.” ing two years’ notice of that change. ees are free to define their respective rights In 2002, Wronko’s colleague, Sean Further, the judge held that by refusing to and obligations in a written contract. Davoren, became president of Western accept the change, Wronko “effectively A clearly drafted termination provision, Inventory Service. At that time, Davoren ended the employment relationship.” for example, can avoid or at least limit presented Wronko with a new contract The trial decision,which is under appeal, most of the disputes that arise at the time stipulating that in the event of his termi- relied on caselaw that states contracts of of termination – both parties have a clear nation without cause, Wronko was to employment that are silent on termination understanding of their respective rights receive just two weeks’ notice per year of contain implied terms that they can be ter- and obligations when the relationship service time, to a maximum of 30 weeks. minated or changed on reasonable notice ends. A written contract of employment Not surprisingly,Wronko refused to sign to the employee. with well-defined terms and conditions the new contract, although he did offer to Nevertheless,it is equally well established brings certainty to the ongoing relation- renegotiate the terms of his employment that implied terms can be overridden by ship between the parties. contract with Davoren. express contractual terms, subject to com- Instead of negotiating an amend- pliance with minimum statutory require- ment,Davoren sent Wronko a letter ments. Wronko’s valid and enforceable “ Contracts of employment that him two years’notice of the unilat- 20, 2000, contained such an express term dated September 9, 2002, giving employment agreement dated December are silent on termination contain giving him two years’compensation on ter- eral change in the termination pro- implied terms that they can be later, Davoren wrote again to terminated or changed on reason- vision of his contract. Two years mination of the employment relationship. In general, courts have been assiduous in able notice to the employee. Wronko stating, in part: “Effective protecting employees’rights when employ- ” in the employment agreement… by employers. The protection of tenure ment contracts or amendments are sought September 9,2004,the terms noted apply and are in full force and laterally eviscerate an employee’s contractu- However, this certainty has been called effect. If you do not wish to accept the new becomes illusory if the employer can uni- into question by an October 2006 deci- terms and conditions of employment as out- al notice rights.The general principle is that sion of the Ontario Superior Court of lined, then we do not have a job for you.” a modification of a pre-existing agreement Justice in Wronko v. Western Inventory Wronko did not accept the change, and will not be enforced unless there is “consid- Service Ltd. therefore understood that his employment eration,”a further benefit to both parties,as The plaintiff, Darrell Wronko, was had been terminated. At trial, Justice opposed to unilaterally benefiting just one employed by Western Inventory Service Jennings found Wronko to be a truthful of the parties. Ltd. for approximately 16 years. In and credible witness whose employment December 2000, he was promoted to the contract signed in December 2000 was Christine O’Donohue is a commercial liti- executive position of Vice-President of valid and binding.He also found that when gator with Miller Thomson in Toronto.She is National Accounts and Marketing. With Wronko left Western Inventory Service, he engaged in trial and appellate work before all that promotion, Wronko signed an had no intention to resign. levels of courts, focusing on employment, pri- employment contract stating that Western That said,the judge dismissed Wronko’s vacy, administrative and real estate litigation Inventory Service must pay him “the pre- action and held that Western Inventory matters. She represented Mr.Wronko in the vious two years’ salary plus bonus… as Service had the right to unilaterally case outlined above. 56 CCCA Canadian Corporate Counsel Association MARCH 2007