There is a season for everything. As of this writing, the current season in Canada is Eras Tour. After Taylor Swift leaves, the holiday season will be upon us. Seasons also matter in the realm of employment law – there are busy seasons and down seasons; there are seasonal jobs and seasonal workers; and as the Small Claims decision in Smith v Lyndebrook Golf Inc.(“Smith”) shows, there is a season for hiring and a season for firing.
Golfing Hazards
The employer in Smith made many mistakes, culminating in the employee being awarded five months’ pay in lieu of notice despite less than one month of service. If you read our blog, you’ll know that notice periods are growing, even for short service employees. This decision underscores and highlights the importance of using well drafted employment agreements with enforceable termination clauses, even with employees whose employment may seem short-lived, such as seasonal employees. As we will detail below, “seasonal employee” can be a deceptive term; these types of employees are not presumed to be temporary hires.
In Smith, the Plaintiff was dismissed without cause and without notice just before he hit his one-month mark with the employer. He sued for wrongful dismissal, and the Court found that he was entitled to five months of reasonable notice. Two factors informed this decision. The first was that the Plaintiff was a highly skilled employee whose skills were restricted to working on golf courses. The second was that, because the nature of his role was seasonal, the timing of the dismissal during the middle of the golf season adversely impacted his ability to find new employment. As such, the Court decided that it would be very difficult for him to find work in a comparable position, as golf clubs do not usually hire mid-season. This extended his notice period considerably.
‘Tis Always the Season for a Good Employment Agreement
Using a good employment agreement would have saved the employer a lot of money. Since he was dismissed with less than three months of service, the Plaintiff was not owed any notice under the Employment Standards Act, 2000 (“ESA”). However, the ESA establishes the floor; it does not displace the common law. In the absence of an enforceable termination provision displacing his entitlement to reasonable notice, the Plaintiff was able to sue for damages. Had there been a good employment agreement in place, the employer would not have owed him anything upon dismissal.
In sum, Smith proves the old adage that while seasons matter in employment law, good employment contracts are evergreen. As mentioned above, this is true even for seemingly temporary seasonal employees. Interestingly, the plaintiff took the position that he was on a fixed term contract, and he claimed the balance as the remainder of the season. Although the Court found that the contract was for an indefinite term, the awarded notice period was basically the same as the balance of the season.
Seasonal Woes
The Court raised a very important point in its discussion: seasonal employees are not automatically presumed to be temporary workers on fixed term agreements that expire at the end of the season. Rather, in the absence of a fixed term employment agreement stating that the term is strictly for the duration of the season, a seasonal employee’s term is indefinite.
Note that while written agreements can lock seasonal employees into fixed terms, enforceable termination clauses are essential. In the absence of an enforceable termination clause, employees terminated before the end of their term are entitled to the full balance of the term – in the context of seasonal employees, they would be entitled to compensation for the remainder of the season.
Employers such as golf clubs and ski resorts often make the mistake of casually hiring workers without such agreements, on the assumption that the season is the term. Consider this situation: a groundskeeper employed by a golf club was dismissed after 14 years. His employment was not subject to a fixed term agreement with an enforceable termination clause. The groundskeeper could sue for notice – he would be considered an indefinite term employee with 14 years of service and the seasonal nature of his employment would extend his notice period as in Smith.
The HR Takeaway
It is difficult to understate the value that implementing good employment agreements provides. If you’re an employer, we can prepare well drafted agreements with enforceable termination clauses. We can also assist with carrying out dismissals in a way that minimizes risk.
If you’re an employee and have been dismissed, we can advise you as to your entitlements and how to approach the situation strategically – your entitlements may be much greater than what you think. We can also review your current employment agreement and advise as to its enforceability, and highlight any other issues.
