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Jurisdictional disputes in employment contracts

In this electronic age, many employers will make offers of employment via email. When the offer is being made to an individual in another province or country, an issue may arise as to what jurisdiction will govern when a dispute arises.

This issue was addressed recently by the Ontario Superior Court in Christmas v. Fort McKay. In this case, an Ontario lawyer was hired as an employee by Fort McKay First Nations, which is located in Alberta. The employee only worked for a couple months before he was dismissed for just cause. He moved back to Ontario after his dismissal. The Ontario Superior Court was asked to determine whether it had jurisdiction over the action.

The plaintiff had received the initial offer of employment by email from Alberta. The plaintiff was in Ontario at the time. He reviewed the offer, revised portions of it and sent it back to the defendant in Alberta, also by email. The defendant accepted the plaintiff’s changes and emailed him an executed copy. The Plaintiff signed the contract in Ontario and sent it back to the defendant.

The plaintiff asserted that since the contract had a choice of law provision which provided that the laws of Ontario would govern the agreement and any disputes arising under it, that the Ontario court had jurisdiction over the action.

The court found that the contract was made in Alberta, and that the Ontario court did not have jurisdiction. It relied on past case law which provides that when acceptance of a contract is transmitted in an electronic format, the contract is considered to be made in the jurisdiction where the acceptance was received.

In this case, it was quite clear that Alberta had jurisdiction. The offer of employment was for work in Alberta, the employer only operated in Alberta, and the offer was made and acceptance was received in Alberta. The plaintiff made some creative arguments to get around it but these were ultimately rejected by the court.

More often than not, this should not be an issue for employers. However, there could be instances where jurisdictional issues arise. Jurisdiction may not be so clear, for instance, where a Canadian employer hires an individual who resides in Ontario through its office in British Columbia where the employee performs work all over the country and has no permanent work location. Having to defend an action in another province can add additional costs and complications. As such, it is important to consider the issue before hiring to avoid surprises.

This blog was originally posted on First Reference Talks, March 5, 2014

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