Hiring a new worker can be exciting. Presumably, by the time you make the job offer, something about the candidate has impressed you and suggested this person is the one for the job. Similarly, most hires are eager for the opportunity to work with you – that’s why they applied for and accepted the job!
Fixed term employment contracts can serve a useful purpose within an organization. They permit employers to limit the engagement of an employee to a set project or a fixed period of time. In circumstances where there is a significant fluctuation in annual work volume or where temporary staff are required to offset absences (such as due to illness or a parental leave) fixed term contracts may be ideal.
Employers who fail to incorporate a binding termination clause into their written employment agreements may face significant, and unexpected, liability for severance. This lesson was learned the hard way by Qualified Metal Fabricators ("QML") in a recent unpublished case out of Toronto.
QML employed Mr. Roy Singh as an assembler from May 2011 until his dismissal, due to an alleged shortage of work, in May 2015. Upon termination, QML paid Mr. Singh 4 weeks' termination pay in compliance with the Employment Standards Act, 2000, and allegedly the terms of his written employment agreement.