In a recent decision, the Superior Court of Quebec held that the termination of a fixed term contract of employment constitutes a breach of contract which may allow for an award of damages for “troubles and inconveniences” suffered by the employee, in addition to damages for early termination.
The Plaintiff had been terminated without cause 15 months before the expiry of the term of his employment contract. The Court concluded that the unilateral termination of the Plaintiff’s fixed term contract was illegal and ordered the Employer to pay the Plaintiff an indemnity equivalent to the wages he should have received until the end of the contract.
The main interest of this case is the Plaintiff’s claim for $50,000 as damages for “troubles and inconveniences”, which required the Court to consider whether such damages could be compensated in the context of a fixed term contract of employment.
In its analysis, the Court first establishes that, while the termination of the Plaintiff was not based on serious grounds, it was not made in an abusive or humiliating fashion. However, the judge accepted that it had nonetheless caused severe stress and anxiety to the Plaintiff, as is almost always the case when a person is terminated.
The Court noted that according to a well-established jurisprudence, in the case of an indeterminate term contract, its unilateral termination by the employer is not, in itself, a civil fault, even if it prejudices the employee. Consequently, except when the termination is made in an abusive way, the compensation for troubles and inconveniences is not available to the employee. This rationale is grounded in the principle that either party to an indeterminate term contract of employment may terminate it by giving notice of its termination to the other party, as recognized under Section 2091 of the Civil Code of Quebec.
However, a fixed term contract is binding on the parties until its expiry and may only be unilaterally resiliated for a serious reason. Thus, the employer who, without a serious reason, resiliates the fixed term contract of an employee does not exercise a right, but rather breaches one of its contractual duties. If the evidence shows that this breach of contract caused troubles and inconveniences, such as stress or anxiety, the terminated employee could be compensated for these damages. In this matter, the Court awarded the Plaintiff $5,000 for troubles and inconveniences.
Thus, according to this decision, a distinction must be made between the unilateral resiliation of indeterminate and fixed term contracts with regards to the award of damages for non-pecuniary loss.