They Loves Me Just the Way I am

Posted by Johannes Schenk on May 9th, 2008 — Posted in Employment Law, Labour Law

Where the employer purports to change a provision in an employment contract and the employee rejects the change, the employer acquiesces in the employee’s refusal if the employment relationship continues on the original terms. The case at hand involved the employer’s purported reduction in a termination period provision. See Wronko v. Western Inventory Service Ltd., 2008 ONCA 327.

Justice Winkler says:

[40] Having been made aware of Wronko’s opposition to the new contract in September 2002 and his continued opposition thereafter, Western had two choices: it could advise Wronko that his refusal to accept the new contract would result in his termination and that re-employment would be offered on the new terms. If Western were to take this position, the termination provision in the December 2000 contract would be triggered. Alternatively, Western could accept that there would be no new agreement and that Wronko’s employment would continue on the existing terms. Having failed to choose the former course, Western must be taken to have acquiesced to Wronko’s position and to have accepted that the terms of the existing contract remained in effect. Western’s decision to terminate Wronko in September 2004 thus carried with it the consequence that Wronko was entitled to two years termination pay pursuant to the terms of his existing employment contract.

The Court really seems to be saying that if you are going to insist on a change in a contract implement it now and take the consequences. Don’t sit back in the weeds to see how the situation plays out.

The Wallace damages discussion in the case seems to take a harder line than the current vogue away from awarding such damages:

[51] In Wallace v. United Grain Growers Ltd., [1997] 3. S.C.R. 701 at para. 95, Iacobucci J. wrote: The point at which the employment relationship ruptures is the time when the employee is most vulnerable and hence, most in need of protection. In recognition of this need, the law ought to encourage conduct that minimizes the damage and dislocation (both economic and personal) that result from dismissal. These legal protections are of little value to an employee who seeks to assert his rights in court, but is faced with an employer who engages in hardball tactics in the course of litigation. To ensure that employees have access to the justice system, the courts must renounce an employer’s use of such tactics. One way to do this is through costs sanctions.

The test doesn’t seem to be any specific bad faith argument. Instead the Court relies on a generally aggressive position taken by the employer. Good on the Ontario Court for that. You don’t see that in the BC Courts these days.

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