The high cost of terminating short term employees

A recent decision in the British Columbia Supreme Court highlights the significant exposure that employers can face when they fail to ensure that the employment relationship is governed by an enforceable employment agreement and, in particular, provisions relating to termination.  Employers are often taken by surprise when they find out the exposure to liability in circumstances involving terminations of short-term employees when the employment relationship has not been properly structured and limitations on liability put in place.  In the recent decision Lesinski v. Cartel Communication Systems Inc., five months’ salary in lieu of notice was awarded to a dismissed employee who had worked for the employer for only 6 months.  The plaintiff was employed in the position of VP of Engineering, earning $180,000 per year in salary with additional enrollment in the profit-sharing plan.  The plaintiff was terminated as a result of project delays that had caused an impact on the company’s financial position. 

At trial, the plaintiff testified that he had sent out over a thousand job applications since his termination and remained unemployed at the time of trial which was nine and a half months after his termination.  The trial judge found that five months’ notice was appropriate in this case because of the senior responsibility and importance of the plaintiff’s employment function and the limited availability of alternate employment.  A take away for employers is that their exposure to liability for without cause terminations can be mitigated by ensuring that they have in place an enforceable employment contract which limits the employee’s common law right to notice.

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