This case deals with the wrongful dismissal of Dr. Melvin Lavallee by the Siksika Nation. Dr. Lavallee had worked at the Siksika Medical Clinic since 1995, a position he took at the age of 50. At the time that Dr. Lavallee began working at the clinic he entered into an oral employment contract. That contract was for a term of twenty years, and stipulated that Dr. Lavallee would be entitled to work a minimum of four days per week throughout the period of his employment. In 2005, Dr. Lavallee’s employment was terminated.
The main issue before the Court of Queen’s Bench concerned whether the oral employment contract should be honoured and, if not, what damages the plaintiff was entitled to in light of the wrongful dismissal.
With regard to the contract issue, the Court of Queen’s Bench recognized that the terms of a fixed term employment contract must be unequivocal and explicit in order to render it enforceable. The court adopted the reasoning from Ceccol v. Ontario Gymnastics Federation (2001), 55 OR (3d) 614 at paras. 26 to 27 (C.A.), which held that a fixed term contract of employment was enforceable where the parties had come to an oral agreement. In such circumstances, it may be difficult for the plaintiff to establish that unequivocal and explicit terms were present such that a fixed term contract should be enforced.
In the case at bar, the Court held that the defendants had offered no evidence to dispute the plaintiff’s claim. Although the contract was verbal, there was sufficient evidence at trial to permit the Court to conclude that the contract satisfied these requirements. The Court accepted that the plaintiff had been induced to enter the contract for a fixed term. The Court held that a fixed term contract existed which was to operate for a term for twenty years, until the plaintiff reached the age of seventy.
Counsel for the defendant argued that the Statute of Frauds rendered the contract unenforceable. Section 4 of the Statute of Frauds states that no action shall be brought upon any agreement which is to be performed outside of the scope of one year unless two requirements are met: the agreement must be reduced to writing, and it must be signed by the parties. On these grounds, the Court found that although the contract existed, it was unenforceable. However, the Court was willing to consider presence of the contract, albeit unenforceable, in determining the appropriate notice available to Mr. Lavallee.
The remaining question dealt with the appropriate period of notice in these circumstances. The Court considered the factors from Bardal, noting that those factors are not exhaustive. In addition to the Bardal factors, the Court also considered the intention of the parties in entering the employment relationship to be a relevant consideration in determining the appropriate period of notice. In light of these considerations, The Court held that a notice period of twelve months was appropriate in this case.
This case is of some relevance to employers who have entered into either a fixed term contract or an oral agreement with employees. The case indicates that where such an agreement may give a court reason to extend the period of reasonable notice period available to an employee. In addition, although not enforceable in this instance, a fixed term employment contract will be enforced by Alberta Courts in certain situations.