Scroll Top

New Employment Contract Term Triggers Constructive Dismissal

A recent decision of the Ontario Labour Relations Board, Sabbah v. University of Ottawademonstrates how mistakes in presenting new employment contracts to current employees can inadvertently trigger a constructive dismissal.

In this decision, Ms. Sabbah had been employed as a Junior Technologist at the University of Ottawa (the “University”) in its Centre for Research on Environmental Microbiology. Prior to assuming this position, she had been a graduate student and had developed a new product through the course of her graduate student work.

When the term of her contract expired she was presented with a renewal agreement which included an intellectual property clause that would assign all intellectual property to the University. She felt that this was an attempt to appropriate her graduate research work. She refused to sign the contract. She asked for clarification and none was provided. Through what can be described as miscommunication (or lack of communication) between the professor in charge of Ms. Sabbah’s work and the University’s Human Resources Services department, Ms. Sabbah was told she had to sign the contract if she wanted to continue working for the University. She still refused to sign. Ms. Sabbah’s employment was terminated for refusing to sign the contract.

Around one week after her employment was terminated, Ms. Sabbah was advised that the inclusion of the intellectual property clause was a mistake. The mistake occurred because a new member of Human Resources provided Ms. Sabbah with the wrong standard form contract.

The Labour Board found this demand to sign the contract triggered a constructive dismissal even though the addition of the intellectual property clause was a mistake. Firstly, the inclusion of the intellectual property clause represented a fundamental change in the terms and conditions of Ms. Sabbah’s employment. Her original contract did not include an intellectual property clause. Attempting to add this new clause in the renewal agreement was a fundamental change.

Secondly, clarification was sought as to why the new clause had been included. No explanation was provided. At the time her employment was terminated, Ms. Sabbah was simply told by the professor that she had to sign the contract with this new clause in order to continue working at the University. Although it was later discovered that the inclusion of the clause was an error, the fact is that this was discovered after Ms. Sabbah’s employment had already been terminated.

In today’s electronic workplace, it is very quick and easy to simply pull out previously used agreements with standard language. However, thought must be given as to what the terms of the contract are. Always review an employment contract before providing it an employee (or potential employee). Otherwise, the employer may end up agreeing to something that was unintended or as we saw in this case, the employer may inadvertently trigger a constructive dismissal.

Given the complexity of this issue, how can any employer be certain whether a contemplated change might trigger a constructive dismissal? Find out at the 2013 Ontario Employment Law Conference, where Jeffrey Murray of our firm will get you up to speed on:

  • What the courts are saying about the threshold for constitute constructive dismissal,
  • When employees must work under the new terms to mitigate their damage claims, and
  • How to manage contemplated changes to improve implementation and minimize legal risk.

So what are you waiting for? This is a whole lot of good advice from knowledgeable professionals! Register for the 2013 Employment Law Conference—and Learn the latest!

This blog was originally posted by Stringer LLP on First Reference Talks, March 6, 2013.

Related Posts