Business Law Article Critique Termination of Employment Contract

In the instant case, the plaintiff was employed as a payroll instructor at a vocational college.  He signed his initial employment contract in January, 2006 this contract set forth the courses to be taught and explicitly provided that the college had no obligation to provide continuing employment beyond the duration of these specific courses.  The contract further provided that the college reserved the right to amend the contract and that the college had the power to terminate the contract at-will.  This termination clause specified that the contractual compensation would be provided if the contract was terminated without cause and acknowledged the minimum statutory notice requirements for a termination with cause.  Plaintiff successfully and without incident completed the first employment contract and a second employment contract was offered and accepted for courses to be taught between September, 2007 and January 7, 2008.  The college, early in the second contracts term, received student complaints pertaining to plaintiffs teaching in the assigned classes and investigated.  A college representative sat in plaintiffs classes, made observations, and subsequently suggested to plaintiff that he show more respect to the students and make greater efforts to encourage student participation in his classes.  Within a month the student complaints continued, the college made the decision that plaintiff had not demonstrated a willingness to improve, and the decision was made to terminate his employment contract on November 30, 2007.  The reasons provided included a vague statement referring to upcoming changes in the program and that an instructor with another skills set was needed (College Instructor Loses his Class 8).  The college provided no severance pay on the grounds that the contract provided only for the statutory minimum notice of two weeks.  Plaintiff initiated a lawsuit pursuant to theories of wrongful dismissal and breach of contract plaintiffs main business law contention with respect to the terminated employment contract was that, being an allegedly indefinite type of employment contract, he could not be terminated with a showing of cause.

The trial court agreed with plaintiff, reasoning that although the college informed plaintiff of certain concerns it neither gave him enough time to alter his teaching behavior nor was a poor teaching attitude a sufficient type of cause to justify termination of the employment contract.  Absent adequate cause for termination, the British Columbia Provincial Court further stated that plaintiff deserved a reasonable type of notice rather than the statutory minimum and that he was therefore entitled to compensation for the remaining term of the contract.

This case clearly illustrates, in a business law context, how termination procedures must conform to both established case law and statutory requirements more particularly, employers risk damages when they fail to allow employees to improve their performance and when cause for termination is not specifically set forth in termination communications.  As the author points out, this is probably a case that should never have reached the courts because the college ought to have better understood its business law obligations with respect to employment contracts.  The implication, after reading about this case, is that there was a personality conflict and that plaintiff was provided tangential and vague reasons for the termination of his contract.  The college, in short, would appear to have tried to circumvent the applicable labor and business laws by providing vague causes which it might reasonably have anticipated would not hold up in litigation.  The college was as a consequence required to pay the remaining balance of plaintiffs contract while simultaneously being compelled to hire an additional instructor and compensate that new instructor as well.  The college therefore suffered additional and unnecessary costs and it may very well be that instructor morale was damaged as a result of the colleges refusal to give plaintiff reasonable time to improve before providing him with disingenuous reasons for his termination.

In the final analysis, from a business law perspective, this case offers some significant lessons.  First, employers cannot interpret their employment contracts to serve their own preferences without also complying with relevant business laws.  Second, judges will not rubber-stamp alleged causes for terminations which are not specific and reasonably supported with evidence.  Finally, there is a policy preference underlying the business law which seems to favor allowing employees a reasonable opportunity to improve their performance and a legal dislike of terminations without a firm basis in fact.  Although this case arose in a college context, it is a useful guide for all employers drafting employment contracts and considering termination.


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