In a recent decision of the Quebec Superior Court, Bouasse c. Gemme canadienne PA inc., 2016 QCCS 1263 (CanLII) (“Bouasse”), an employee was awarded damages for trouble, inconvenience and moral prejudice for stress and anxiety associated with the illegal termination of a fixed-term employment contract. Significantly, the Superior Court decided to distinguish fixed-term employment contracts from indeterminate-term employment contracts with respect to such damages. According to Bouasse, an employee employed under a fixed-term contract may claim damages for trouble, inconvenience and moral prejudice if her employer illegally and unilaterally terminates her employment contract without a serious reason before the expiry of the agreed-upon term of employment.
Indeterminate-term employment contracts: the rule in Standard Broadcasting
According to the Bouasse decision, an employee almost always experiences trouble, inconvenience, stress and anxiety following a dismissal.1 However, while stress, anxiety and inconvenience are generally recognized under Quebec law as forms of prejudice for which a person can claim compensation, a jurisprudentially developed rule set out in Standard Broadcasting Corporation Ltd. c. Stewart, 1994 CanLII 5837 (QC CA) [“StandardBroadcasting”] states that these types of damages cannot be awarded for the simple termination of an indeterminate-term employment contract. This is because the Civil Code of Quebec [the “CCQ”] specifically states that both an employer and an employee can unilaterally terminate an indeterminate-term employment contract on the condition that the party terminating the contract provide the other party with notice of termination.2
The right to unilaterally terminate an indeterminate-term employment contract is a legislative exception to the general rule that contracts are irrevocable.3 In Bouasse,the Superior Court explained that Standard Broadcasting stood for the principle that the simple exercise of a legislative right to unilaterally terminate an indeterminate-term contract does not entitle the other party to moral damages because a civil fault, such as bad faith in the exercise of a right, is required to claim damages.4 Therefore, despite any stress, anxiety or inconvenience suffered by an employee upon the unilateral termination of an indeterminate-term employment contract, in the absence of a civil fault committed by the employer, “notice of termination … will have to suffice to indemnify the employee, without it being necessary to complete the indemnity with the awarding of moral damages.”5 The Superior Court further explained that, “this reasoning is based on the idea that the employer has the right to carry out the dismissal, however, he cannot abuse this right.”6
Fixed-term employment contracts present a different context
No equivalent legislative exception to the rule that contracts are irrevocable exists for fixed-term employment contracts. While both types of contracts (i.e., fixed-term and indeterminate-term employment contracts) may be unilaterally resiliated for a serious reason, in the absence of a serious reason for termination, only indeterminate-term employment contracts may be unilaterally resiliated by either party upon notice of termination under the CCQ. The Superior Court in Bouasse therefore reasoned that if an employer unilaterally resiliates a fixed-term employment contract without right, the resiliation is illegal and the employer “is liable for any bodily, moral or material injury”7 caused by his failure to respect his contractual obligations.8
In Bouasse, the plaintiff, who was terminated without cause a little over 14 months before the expiry of his fixed-term contract, claimed $50,000 under the heading of trouble, inconvenience and moral damages for the allegedly abusive manner in which he was dismissed, reputational harm, humiliation and stress. While the Superior Court did not find that the manner of termination was abusive, humiliating, or damaging to the plaintiff’s reputation, it acknowledged that
“…it is undeniable that a dismissal upsets the life of the person dismissed and almost always involves, albeit to varying degrees, anxiety, stress and inconvenience. The Court has no difficulty believing that the Plaintiff has experienced significant inconveniences, and has suffered stress and anxiety due to the abrupt termination of his employment contract, as he has indicated in his testimony.”9
The plaintiff was awarded $5,000 in moral damages in addition to damages for early termination equal to his lost salary for the balance of the contract, less damages mitigated.
The Superior Court’s strong statement that stress and anxiety will almost “always” follow a dismissal appears to suggests that decisions following Bouasse may award damages for trouble, inconvenience and moral prejudice for the illegal termination of a fixed-term employment contract almost as a matter of course. However, the Superior Court also reminded us that such damages will only be awarded upon proof of actual prejudice. In Bouasse,the Superior Court found that the Plaintiff was placed in a “most uncomfortable position and certainly the source of great stress and anxiety”10 following his termination due to the following circumstances: he had left his job in France in order to move to Canada to work for the Defendant, he was in Canada on a work permit which only enable him to work for his former employer, and he could only receive unemployment assistance in Canada, however, “his family and his social network” were in France, leading the Superior Court to comment that he was “stuck between two jurisdictions.”11 Thus, while the Superior Court has opened the door to damages for trouble, inconvenience and moral prejudice for the illegal termination of a fixed-term employment contract, whether or not such damages will be awarded will depend on the facts proven at trial.