In a recent B.C. Supreme Court decision, the issue of whether an employee with a fixed-term contract is continuously employed and, therefore, entitled to reasonable notice was clarified in Monjushko v. Century College Ltd. In that case, the plaintiff argued that he was entitled to damages in lieu of reasonable notice for the nine years he was employed by the defendant. The defendant claimed that the plaintiff was hired on a fixed-term contract and was, therefore, not entitled to any reasonable notice.

The Facts

The plaintiff, Dr. Monjushko, was a Ukrainian mechanical engineer who worked as an instructor and associate professor before he immigrated to Canada in 1995. In 1996, Monjushko began working for the defendant, Century College Ltd. ("Century"), as an instructor for Century's math and computer science–related distance education courses provided under contract with Athabasca University.

Century gave Monjushko an appointment letter at the start of each academic term, the first one in January 1996. Each of these appointment letters stated that the plaintiff 's appointment as instructor had been approved for the upcoming semester, and noted which courses the plaintiff would be teaching that term as well as the exact start and end dates of the semester. From 1996 to 2004, Century issued a total of 40 appointment letters to Monjushko. The form of the appointment letters for each semester were nearly identical to the others, with only the semester start and end dates and the particular course names changing. In return, Monjushko issued invoices to Century under the name of AVM Computing, a business name he used. All invoices listed AVM Computing's address as Monjushko's home address.

The issue of whether Monjushko was an independent contractor or an employee was considered by the Canada Customs and Revenue Agency ("CCRA") in 2004. A letter was sent by CCRA to Century and it did not appeal the CCRA ruling. Rather, Century issued T4 statements to Monjushko for each year that he worked.

Around the end of October 2004, Century learned that Athabasca University did not intend to renew its partnership agreement after the current agreement expired in June 2005. After learning this, and prior to the sale of the company some months later, Century issued one last appointment letter to Monjushko in December 2004. That letter covered the spring 2005 semester that ran from January 10, 2005 to April 22, 2005.

Sometime in April 2005, Monjushko was informed without warning that his employment would be terminated at the end of the semester. On April 28, 2005, Century issued a Record of Employment ("ROE") to Monjushko that noted the first day worked as January 2, 1996 and the last day paid as April 22, 2005. This was the one and only ROE that Century issued to Monjushko.

The Case at Bar

In this case, Madam Justice Loo found the facts of this case to "fly in the face" of the defendant's assertion that each of the 40 appointments was a separate fixed-term contract that did not require any termination notice. In particular, she made note of the start and end dates quoted on the ROE issued to Monjushko, as well as the fact that there was only one ROE, instead of a ROE being issued at the end of each semester.

These facts, combined with the fact that Century never appealed the CCRA ruling that Monjushko was an employee and not an independent contractor, led the judge to conclude that Monjushko was considered by both parties to be continuously employed from January 2, 1996 to April 22, 2005. In light of this conclusion, the judge held that the plaintiff was entitled to reasonable notice of the termination of his employment.

Madam Justice Loo's decision in this case appears to have been strongly influenced by Justice MacPherson's reasoning in the Ceccol decision.

The reasoning, it seems, is that employers should not be able to evade the traditional protections of the ESA and the common law by resorting to the label of "fixed-term contract" when the underlying reality of the employment relationship is something quite different; namely, continuous service by the employee for many years coupled with verbal representations and conduct on the part of the employer that clearly signal an indefinite term relationship.

Applying this reasoning to Monjushko's case appears to be at the heart of the court's decision. A party's reasonable expectations must be considered and employers cannot be allowed to evade traditional legal protections by merely applying the "fixed-term" label to the employment relationship.

Interestingly, while Madam Justice Loo found that there were insufficient facts to support a finding for Wallace damages (aggravated damages awarded against an employer for their bad-faith conduct in the manner in which the employee was dismissed), she found another way to penalize Century for its behaviour. The Judge states that:

Century knew at the end of October 2004 that it would no longer have work for Dr. Monjushko after its partnership agreement with Athabasca University ended in June 2005, or even sooner, when the semester ended in April 2005. However, it did not make that fact known to Dr. Monjushko when it ought to have.

Judge Loo does not indicate the precise extent to which this factor increased the damages award she made; however, it was held that 15 months was the appropriate notice period in this case.

Based on the result of this case, employers should be warned that the courts will not hesitate to search below the surface of an employment contract, and the "fixed-term" label, to determine whether an employee is entitled to and has received reasonable notice.