Interpreting contracts

Examining reasonable expectations in a contract bearing more than one construction
|Canadian Employment Law Today

There is a fundamental principle in employment law that “a contract of employment for an indefinite period is terminable only if reasonable notice is given.”

This principle is not absolute but can be rebutted if the employment contract clearly specifies some other period of notice. This principle only applies to employees engaged for an indefinite period. It does not apply to fixed term contracts of employment.

When Diana Ceccol was dismissed from her employment with the Ontario Gymnastic Federation after 16 years of service she brought an action for wrongful dismissal. Her employer took the position that Ms. Ceccol was not employed for an indefinite period, but rather for a fixed term of one year, based on her contract of employment. Because she was on a fixed term, Ms. Ceccol was not dismissed. Her employment simply ceased in accordance with the terms of the contract.