Employers, beware: sloppy employment contracts can cost you—big time.
Karen Dufault thought she had job security when she signed a two-year fixed-term contract for a youth engagement coordinator position at the Township of Ignace.
Despite her effectiveness in the role, Dufault’s responsibilities were gradually reassigned to another employee—leaving her increasingly worried about her future at the township.
Just two months after accepting the agreement in November 2022, she was abruptly let go without cause and offered only two weeks of severance pay.
Feeling blindsided, Dufault turned to Samfiru Tumarkin LLP, a leading employment law firm known for precedent-setting cases, who successfully argued that the termination clause in her contract violated the province’s Employment Standards Act (ESA).
The case led to a decisive victory for Dufault, with the Ontario Court of Appeal (ONCA) upholding a $157,000 judgment in her favour.
This ruling is being hailed as a wake-up call for employers in the province and a massive win for employee rights.
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Fixed-term contracts are a “legal time bomb”
Lior Samfiru, co-founding partner of Samfiru Tumarkin LLP and host of the Employment Law Show on TV and radio, didn’t hold back in his assessment of Dufault’s case.
“This is a prime example of how costly a careless approach to contracts can be. While her employer was hoping to provide a meager two weeks of severance pay, they ended up owing her the entire balance of the two-year agreement—more than $157,000,” said Samfiru.
“Attempting to insert ‘outs’ to dodge their severance obligations was rejected by the courts. The message is clear: half-baked and illegal contracts won’t fly.”
Samfiru, whose firm recently achieved certification of a $400-million class-action lawsuit to secure employee rights for Uber drivers in Ontario, offered an unflinching warning to employers:
“A fixed-term contract is a ticking legal time bomb. If you’re not careful, they can explode into massive liabilities. Unless absolutely necessary, you should avoid them. If you do use them, get them right—every clause, every word. Otherwise, you’re risking a financial disaster.”
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This isn’t the first time that Samfiru Tumarkin LLP has emerged victorious from a fixed-term contract dispute.
In a case against Bausch & Lomb Canada, our firm secured $50,000 in damages for an employee whose agreement was improperly terminated.
An important win for employees
Jon Pinkus, a partner at Samfiru Tumarkin LLP who represented Dufault alongside Samfiru, said the ruling is a “powerful reminder” of the protections Ontarians have under the ESA.
“One thing employers in the province will never be able to ‘boss around’ or circumvent is the law. If you’re fired or let go, and the employment contract you signed contains a termination clause, all hope isn’t lost—seek legal advice before accepting a severance offer.”
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The bottom line
The ONCA’s decision to uphold the $157,000 judgment is a cautionary tale for employers in the province.
Fixed-term contracts may seem convenient, but they can have dire financial consequences—as shown in Dufault’s case.
With courts continuing to demand strict adherence to employment laws, companies must ensure that their agreements are airtight.
READ MORE: 6 common employer mistakes that could lead to a bigger payout after termination
The experienced employment law team at Samfiru Tumarkin LLP has a proven track record of holding employers accountable. If you’re experiencing a workplace issue in Ontario, contact our firm.
Since 2007, we’ve helped tens of thousands of non-unionized individuals in the province enforce their rights and secure the compensation they deserve.
Our goal is to deliver the results that matter to you. We’ve structured our fees to be as transparent, fair and accessible as possible.
Contract cut short? Employer pressuring you to accept a severance offer immediately?
Contact the firm or call 1-855-821-5900 for a consultation with an employment or disability lawyer. We’ll provide you with the advice you need and the compensation you deserve.
Samfiru Tumarkin LLP is Canada’s most positively reviewed law firm specializing in employment law and long-term disability claims. The firm provides legal insight on Canada’s only Employment Law Show and Disability Law Show on TV and radio.