Employer didn’t notice critical change in employment contract during renegotiation that struck out termination provisions limiting notice
Read and understand the employment contract before you sign it — that’s a message lawyers and courts have driven home to employees when accepting a job offer.
However, employers would be equally wise to ensure they too read the contract before signing, as a Vancouver-area resort recently found out.
Dominique Dien was hired as the executive chef for Grouse Mountain Resorts Ltd., a ski and recreational resort in North Vancouver, B.C., on Nov. 1, 1999, at a salary of $75,000. The employment contract specified, among other things, that the agreement could be terminated by the company at any time for cause.
It also specified Dien’s employment could be terminated without cause upon two weeks’ written notice or pay in lieu thereof. After six months of uninterrupted employment, the agreement stipulated he could be terminated without cause upon 30 days’ notice or pay in lieu thereof. It specifically stated any termination would comply with the Employment Standards Act.
That likely would have been an ironclad, enforceable contract. But things changed. The contract also provided for the payment of a bonus to Dien if the restaurant exceeded specified annual revenues and if the food and labour costs were lower than specified amounts.
In July 2000 Dien wanted to renegotiate the terms of the contract, particularly the labour cost bonus. The general manager of the resort gave the food and beverage manager the authority to renegotiate the contract. The manager proposed some amendments, and Dien sought legal advice. Dien’s solicitor said he should seek an elimination of the termination provisions from the contract.
Dien relayed the concerns about the termination provisions to the manager. The manager incorporated the changes into a new employment contract that no longer contained the termination provision. The renegotiated agreement was executed by Dien and the manager on July 1, 2000, and subsequently by the general manager.
On Feb. 1, 2001, Grouse Mountain terminated Dien’s employment. It did not assert just cause. It relied on the termination provision contained in the original agreement and paid Dien $9,000 in severance (six weeks at $3,000 every two weeks.) It also gave him a glowing letter of recommendation.
Grouse Mountain took the position that the amended employment contract, insofar as the termination provision was concerned, was not binding. The general manager said the only change contemplated to the employment agreement was the bonus provision and that he “did not intend to agree to the removal of the termination provision.”
He said he did not discuss the removal of that term either with the food and beverage manager or Dien. If its removal from the document had been brought to his attention, he would have insisted that it be reinserted.
But the B.C. Supreme Court didn’t buy that argument. It said the food and beverage manager was given the authority to renegotiate the contract and he agreed to the removal of the termination provision.
“There was no mutual mistake nor was it a unilateral amendment of the contract,” said the court. “The agreement was signed by (the general manager) and it is no answer, in my view, for (him) to say that he was careless in not reading the document and that if he had read it, he would have objected.”
The court said there was a clear meeting of the minds on the new contract, and that it was in force at the time Dien’s employment was terminated without cause. Dien was 46 at the time of his termination. He was a certified chef with more than 30 years’ experience. He was trained in France and had worked in a number of different hotels and restaurants in Europe and Canada. He had been employed for 15 months in a position of middle management with responsibility for three sous chefs and a number of other employees. He was responsible for hiring, firing, training and supervising his staff, designating menus and maintaining labour and food costs within the budget provided.
Taking into his account his age, training, experiences, responsibilities and length of service, the court awarded Dien six months’ notice plus bonuses for a total of $43,707.50.
From that it deducted the $9,000 Grouse Mountain already paid him, $24,282 Dien earned at a job in the United States during the notice period and $328 he owed for rental of equipment for a net amount of $10,097.50.
For more information see:
• Dien v. Grouse Mountain Resorts Ltd., 2005 CarswellBC 2194 (B.C. S.C.)
However, employers would be equally wise to ensure they too read the contract before signing, as a Vancouver-area resort recently found out.
Dominique Dien was hired as the executive chef for Grouse Mountain Resorts Ltd., a ski and recreational resort in North Vancouver, B.C., on Nov. 1, 1999, at a salary of $75,000. The employment contract specified, among other things, that the agreement could be terminated by the company at any time for cause.
It also specified Dien’s employment could be terminated without cause upon two weeks’ written notice or pay in lieu thereof. After six months of uninterrupted employment, the agreement stipulated he could be terminated without cause upon 30 days’ notice or pay in lieu thereof. It specifically stated any termination would comply with the Employment Standards Act.
That likely would have been an ironclad, enforceable contract. But things changed. The contract also provided for the payment of a bonus to Dien if the restaurant exceeded specified annual revenues and if the food and labour costs were lower than specified amounts.
In July 2000 Dien wanted to renegotiate the terms of the contract, particularly the labour cost bonus. The general manager of the resort gave the food and beverage manager the authority to renegotiate the contract. The manager proposed some amendments, and Dien sought legal advice. Dien’s solicitor said he should seek an elimination of the termination provisions from the contract.
Dien relayed the concerns about the termination provisions to the manager. The manager incorporated the changes into a new employment contract that no longer contained the termination provision. The renegotiated agreement was executed by Dien and the manager on July 1, 2000, and subsequently by the general manager.
On Feb. 1, 2001, Grouse Mountain terminated Dien’s employment. It did not assert just cause. It relied on the termination provision contained in the original agreement and paid Dien $9,000 in severance (six weeks at $3,000 every two weeks.) It also gave him a glowing letter of recommendation.
Grouse Mountain took the position that the amended employment contract, insofar as the termination provision was concerned, was not binding. The general manager said the only change contemplated to the employment agreement was the bonus provision and that he “did not intend to agree to the removal of the termination provision.”
He said he did not discuss the removal of that term either with the food and beverage manager or Dien. If its removal from the document had been brought to his attention, he would have insisted that it be reinserted.
But the B.C. Supreme Court didn’t buy that argument. It said the food and beverage manager was given the authority to renegotiate the contract and he agreed to the removal of the termination provision.
“There was no mutual mistake nor was it a unilateral amendment of the contract,” said the court. “The agreement was signed by (the general manager) and it is no answer, in my view, for (him) to say that he was careless in not reading the document and that if he had read it, he would have objected.”
The court said there was a clear meeting of the minds on the new contract, and that it was in force at the time Dien’s employment was terminated without cause. Dien was 46 at the time of his termination. He was a certified chef with more than 30 years’ experience. He was trained in France and had worked in a number of different hotels and restaurants in Europe and Canada. He had been employed for 15 months in a position of middle management with responsibility for three sous chefs and a number of other employees. He was responsible for hiring, firing, training and supervising his staff, designating menus and maintaining labour and food costs within the budget provided.
Taking into his account his age, training, experiences, responsibilities and length of service, the court awarded Dien six months’ notice plus bonuses for a total of $43,707.50.
From that it deducted the $9,000 Grouse Mountain already paid him, $24,282 Dien earned at a job in the United States during the notice period and $328 he owed for rental of equipment for a net amount of $10,097.50.
For more information see:
• Dien v. Grouse Mountain Resorts Ltd., 2005 CarswellBC 2194 (B.C. S.C.)
