The Potential High Cost of Promotions

18. June 2019 0

A recent decision by the Saskatchewan Queens Bench, McKercher v. Stantec Architecture Ltd., 2019 SKQB 100, highlights the potential exposure to liability for employers when they promote employees without putting in place new employment agreements.  McKercher was terminated after 11 years service.  His role with Stantec had changed significantly over his years of employment.  When he was originally hired he signed an employment contract which included a termination provision stating that he would receive essentially one weeks notice for every year of service.  He did not sign new employment agreements with each promotion and at the time of his termination, the employer relied on the original contract as a basis for paying only 11 weeks pay in lieu of notice for this without cause termination.  McKercher sued, alleging that the original employment agreement did not limit his entitlement to notice of the termination and the court agreed.  The court made the following findings:

  • McKercher’s responsibilities and the nature of his employment significantly changed during his 11 year tenure with the employer.
  • There was no indication either at the time of his hiring or in the wording of his contract of employment that the employer contemplated the extent of the promotions that McKercher ultimately received.
  • That each time a promotion occurred, the employer did not make clear to McKercher that the termination provisions included in his original employment agreement would apply.

The court ultimately concluded that the promotions that McKercher received throughout his employment overtook the original notice provision, making it unenforceable.  As a result, McKercher was entitled to common law notice which was found to be 12 months.

The lesson for employers is to ensure that with substantial changes to job duties new employment contracts should be executed.  This is necessary to ensure the protection of contractual limitations to notice.  Reliance on employment contracts that have no relationship to an employee’s current role will likely lead to a finding that the protection provided by the notice limit set out in the contract do not apply.

 

Questions?  Comments?  Please contact Rose Keith at rkeith@harpergrey.com or anyone else from our team listed on the Authors page.

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