If the recent years of litigating employment disputes throughout Canada have revealed anything, it would be that the legal resolution of key workplace issues varies widely between provinces, to the point where sound guidance in one province could be regarded as inadequate or even negligent in another.

Although courts in Ontario have a tendency to invalidate employment contracts for theoretical breaches of the Employment Standards Act and trivial ambiguities found in the language, B.C. courts have routinely dismissed the idea that minor drafting errors will render an entire employment contract unenforceable.

However, employers in B.C. should now be on high alert as gone are the days that judges will playfully opine that employment contracts need not be a “masterpiece in drafting” to withstand judicial scrutiny. This is highlighted by the recent British Columbia Supreme Court decision Briggs v ABC Insurance Solutions Inc., 2024 BCSC 1918 (“Briggs”), which has sent ripples through the employment law world and serves as a message to both employers and employees to immediately review their employment contracts.

Background

Lauren Briggs sued her former employer, ABC Insurance Solutions Inc., for wrongful dismissal. The employer had a remote-work policy in place in response to the Covid-19 pandemic.  Once the pandemic was over, the employer chose to end that policy and demand a return to work. This would have resulted in $1,200 per month in gas expenses due to Ms. Briggs’ place of residence.  Over several months, Ms. Briggs continuously requested a gas allowance to offset this cost (which amounted to nearly 20% of her gross pay).

In July 2023, Ms. Briggs sent an email to her superior stating that she was unable to come into work as it was no longer financially feasible for her to attend the office in person and all of her tasks could be professionally and efficiently completed at home. Notably, Ms. Briggs maintained that at the time of hiring, she was informed that the position was a hybrid role, meaning that she could work at home as well as in the office. She also stated that working from home was the norm in the workplace.

Surprisingly, the employer responded to her email stating that she will no longer be employed with the company. The company issued Ms. Briggs’ record of employment with reason being dismissal for cause.

Ms. Briggs then sued the company for wrongful dismissal and stated that she was entitled to reasonable notice of termination at common law since the termination clause in her employment contract was unenforceable.

Invalidating the Termination Clause

The court found the following termination clause unenforceable on the basis of ambiguity:

“[t]he Employee and the Employer agree that reasonable and sufficient notice of termination by the Employer is the greater of two (2) weeks or any minimum notice required by law”.

Specifically, the court took issue with the phrase “any minimum notice required by law” as it was unclear whether the provision was referencing statute law or common law. Moreover, the court noted that “[the word ‘any’] does not even acknowledge there is a minimum at all. There might be a minimum, or there might not be, and there may be more than one source of law to consider”.

As a result, the court held that the termination clause was ambiguous and unenforceable, leaving the 36-year-old plaintiff employee, with 20 months of service, entitled to 4.5 months of reasonable notice as calculated in accordance with the common law.

Key Takeaways

This decision, and the impact it will inevitably have on the enforceability of various employment contracts, reinforces how important it is for employers to ensure that their employment contracts are up to date. It is critical to regularly consult with an employment lawyer as employment law, especially the law surrounding termination clauses, is constantly evolving. Briggs highlights the fact that a contract which was legally sound a few years ago may now be outdated and unenforceable due to recent decisions. Failing to update contracts in light of these changes can lead to situations where employers inadvertently violate employee rights, potentially leading to costly litigation disputes and reputational damage.

Recent trends in employment law make it clear that courts are more inclined to overturn contracts than to enforce them, so a poorly drafted contract exposes employers to significant legal risks and may not hold up in court if challenged. As Briggs exemplifies, vague or overly broad language around termination may lead to costly disputes if employees interpret clauses differently than an employer intended. To avoid this, employment contracts should be clearly worded, transparent, and carefully tailored to meet both the unique needs of the business and relevant employment laws. In light of Briggs, it is clear that termination clauses must refer to the specific applicable employment standards legislation and should outline the statute’s formula for calculating reasonable notice, so it is clear and unambiguous what the employee will be entitled to in terms of notice.

If you are an employer, you should book a consultation with one of our experienced lawyers to have your employment contracts reviewed and ensure that the termination provisions contained within are enforceable.

If you are an employee, you should book a consultation with one of our experienced lawyers to have your employment contract reviewed to see if it is affected by this decision.

Conclusion

It is unclear whether the recent tendency of B.C. courts to invalidate employment contracts will continue. But one thing is for sure, employees should always ensure to seek legal advice upon the termination of their employment. If you have been let go and informed that a termination clause restricts your severance entitlements, it is always wise to seek a second opinion.