But with fixed-term contracts, that duty doesn’t apply in the same way. Employers must continue paying damages for the remainder of the contract, regardless of whether the employee finds new employment, she explains.
“The damages are much greater than [those under] the Employment Standards Act because they consider how long it will take for that employee to find comparable employment,” she says. “And if you’re dealing with someone who’s older in age, holds a managerial position, or is earning significantly more, that heightens the notice period.”
The costs of cutting contracts early
Other pitfalls can arise when employers end a fixed-term contract prematurely.
If an employer decides to end a fixed-term contract before it is supposed to end, they may be liable for paying the full contract period, Perricone says.
“If you hire someone for a 12-month contract, and you decide this person’s not working out, and you terminate them at the six-month mark… now you’re on the hook for the remaining six months under employment law,” she explains. “[Whereas] if someone worked for you for less than a year, the Employment Standards Act says you’re only on the hook for one week.”