Judgments

[1996] 1 F.C. 387

T-2656-94

Sagkeeng Education Authority Inc. (Applicant)

v.

Alma Jean Guimond and Thomas A. Goodman (Respondents)

Indexed as: Sagkeeng Education Authority Inc. v. Guimond (T.D.)

Trial Division, Noël J.—Winnipeg, October 25; Ottawa, November 15, 1995.

Labour relations — Judicial review of Adjudicator’s finding of unjust dismissal — Respondent entering into permanent teaching contract in 1981 — In 1983, School Board changing policy, requiring teachers to sign annual contracts — Respondent signing annual contracts for ten years — In 1993 contract not renewed — Dismissal pre-condition to Adjudicator’s jurisdiction under Canada Labour Code, s. 240(1) — By signing first, subsequent annual contracts respondent consenting to, bound by, variation — No legal right to permanent employment — Unequal bargaining position not ground to repudiate contract — Decision not to renew contract not “dismissal” within s. 240(1) — Adjudicator lacked jurisdiction to hear complaint.

This was an application for judicial review of an adjudicator’s finding of unjust dismissal. In September, 1981 the respondent Guimond entered into a permanent teaching contract with the Fort Alexander Band School Board on behalf of the applicant. In 1983 the Board changed its employment practice and required teachers to sign annual contracts, notwithstanding that some teachers had previously entered into permanent teaching contracts. The respondent had entered into such annual contracts until 1993 when her contract was not renewed. The Adjudicator held that by requiring the respondent to sign an annual contract despite the “permanent” teaching contract, the applicant arbitrarily altered the employment relationship “under the guise of termination and replacement”. He found that a refusal to sign the annual contracts would have invited termination, and added that the inequality of bargaining power in favour of the employer made the employer’s unilateral alteration of the employment relationship “unconscionable”.

An essential pre-condition to an adjudicator’s jurisdiction to consider a complaint of unjust dismissal under Canada Labour Code, subsection 240(1) is for the complainant to establish that he or she has been dismissed. The issue was whether the respondent was dismissed from her employment.

Held, the application should be allowed.

An employment policy introduced by an employer does not become a term of the employment contract unless and until it has been clearly agreed to by the employee. Knowledge of the policy by an employee while continuing in the same employment without asserting any objection will not necessarily be construed as acquiescence particularly where a denunciation of the policy could invite termination. However, if there is clear and unequivocal acceptance of the policy as a term of employment, the policy is binding on the employee. By signing the first annual contract and each one thereafter over a ten-year period, the respondent consented, in the clearest way possible, to the variation to the contract proposed by her employer. The Adjudicator erred in failing to take note of this acceptance.

If the Adjudicator’s holding was that the respondent should be relieved from the contract on the sole ground that her bargaining position was inferior to that of the employer, then such decision was entirely without legal foundation. Unequal bargaining positions have never been held to be a ground for allowing an employee to repudiate the terms of a contract. There was nothing “unconscionable” about the circumstances in which the respondent chose to accept the modified terms of employment. There is no legal right to permanent employment. An employer may attempt to change the fundamental terms of an employment contract, in which case an employee may accept or refuse to adhere to changes. If an employee refuses, an employer cannot compel acceptance, but retains the right to terminate employment provided that reasonable notice is given.

The applicant’s decision not to renew the last contract was made in conformity with its terms and did not result in a dismissal within the meaning of subsection 240(1) of the Canada Labour Code. As the complainant was not dismissed, the Adjudicator lacked jurisdiction to consider the complaint under Code, section 242.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Canada Labour Code, R.S.C., 1985, c. L-2, ss. 240(1) (as am. by R.S.C., 1985 (1st Supp.), c. 9, s. 15), 242 (as am. idem, s. 16), 243.

Federal Court Act, R.S.C., 1985, c. F-7, s. 18.1 (as enacted by S.C. 1990, c. 8, s. 5).

CASES JUDICIALLY CONSIDERED

APPLIED:

U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; (1988), 35 Admin. L.R. 153; 95 N.R. 161; Canada Post Corp. v. Pollard, [1994] 1 F.C. 652 (1993), 109 D.L.R. (4th) 272; 18 Admin. L.R. (2d) 67; 1 C.C.E.L. (2d) 75; 94 CLLC 14,006; 161 N.R. 66 (C.A.); Byers Transport Ltd. v. Kosanovich, [1995] 3 F.C. 354 (1995), 81 F.T.R. 110 (C.A.); Srougi v. Lufthansa German Airlines (1988), 93 N.R. 244 (F.C.A.); Caimaw v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983; (1989), 62 D.L.R. (4th) 437; [1989] 6 W.W.R. 673; 40 B.C.L.R. (2d) 1; 40 Admin. L.R. 181; 89 CLLC 14,050; Eskasoni School Board and Eskasoni Band Council v. MacIssac et al. (1986), 69 N.R. 315 (F.C.A.).

DISTINGUISHED:

Wiebe v. Central Transport Refrigeration (Man.) Ltd. (1994), 95 Man. R. (2d) 65; [1994] 6 W.W.R. 305 (C.A.); Hill v. Peter Gorman Ltd. (1957), 9 D.L.R. (2d) 124 (Ont. C.A.); Pronovost v. Northwest Accept. Corp. (1983), 48 B.C.L.R. 281 (S.C.); Starcevich v. Woodward’s Ltd. (1991), 58 B.C.L.R. (2d) 254; 37 C.C.E.L. 46 (S.C.).

REFERRED TO:

Beothuk Data Systems Ltd. v. Dean, [1996] 1 F.C. 451(T.D.); Sagkeeng Alcohol Rehab Centre Inc. v. Abraham, [1994] 3 F.C. 449 (1994), 79 F.T.R. 53 (T.D.).

APPLICATION for judicial review of an adjudicator’s finding of unjust dismissal arising from the employer’s refusal to renew the respondent’s contract which the employee had signed annually for ten years notwithstanding that she had previously entered into a permanent teaching contract. Application allowed for lack of jurisdiction as there was no dismissal.

COUNSEL:

Jeffrey J. Palamar for applicant.

Marc M. Monnin for respondents.

SOLICITORS:

Taylor, McCaffrey, Winnipeg, for applicant.

Aikins, MacAulay & Thorvaldson, Winnipeg, for respondents.

The following are the reasons for order rendered in English by

Noël J.: This is an application for judicial review pursuant to section 18.1 of the Federal Court Act [R.S.C., 1985, c. F-7 (as enacted by S.C. 1990, c. 8, s. 5)] of the decision of an adjudicator (the Adjudicator) appointed under Division XIV, Part III of the Canada Labour Code[1] in the matter of a complaint of alleged unjust dismissal brought by Alma Jean Guimond (the respondent) against the Sagkeeng Education Authority (the applicant).

FACTS

A summary of the facts relevant to this application for judicial review are found in the Adjudicator’s decision:[2]

The complainant is a school teacher who acquired her Bachelor of Teaching degree from Brandon University in October of 1978. She originally entered into a one-year contract of employment with the Fort Alexander Band School Board on behalf of the respondent for the 1978-1979 school year. Similar contracts were entered for the subsequent two school years. Then as of September 1, 1981 the complainant entered a contract with the Fort Alexander School Board on behalf of the respondent whereby it agreed to employ her as a “permanent teacher”. The contract had no predetermined date of expiration but did include the following provisions regarding term:

“III. The Teacher will be given one full year’s written notice by the Board on or before August 31 of the last year of service if cause for termination of employment should arise.”

“X. This Agreement may be terminated

(a)  at any time by the mutual consent in writing of the Teacher and the Board; or

(b)  on the 31st of August of any year by either party giving written notice to the other on or before the 1st of September of the preceding year; or

(c)  if any matter arises, whereby the Teacher is guilty of a grossly immoral, delinquent, or illegal act, or gross dereliction of duty, and the Teacher having recourse to section (d) below, the Board may give the Teacher thirty days written notice of termination, and the contract is terminated at the expiration of the thirty days from the date the notice is given.

(d)  In the event of any disagreement between the Teacher and the Board, the above consent to arbitration by a committee comprising

three persons chosen by the Board,

three persons chosen by the Teacher, and

one person with arbitration experience and belonging to a professional organization. The selection of this person shall be mutually agreed upon by the Teacher and the Board.

Such proceedings will constitute an `Appeal by the Teacher’.”

In 1981, a group of school teachers employed by the Band sought to unionize under the auspices of the Manitoba Teacher’s Society. Their efforts failed and ultimately four teachers were dismissed. The teachers instituted legal proceedings against the respondent alleging wrongful dismissal and ultimately they were awarded damages.

The Board then implemented a change of its employment practice. Teachers were thereafter required to sign annual contracts with the respondent and the school board, notwithstanding the fact that teachers such as the complainant had previously entered permanent teaching contracts. The complainant entered such annual contracts each year from that time until 1993 when she was refused a new contract and ultimately these proceedings arose.

In March 1993, Ms. Karen Courchene, the principal of Anicinabe School, conducted an evaluation of the complainant. The evaluation detailed various criticisms, including that the complainant lacked enthusiasm, and recommended that the complainant improve both her spoken and written grammar and her grasp of core subjects, especially English language arts. The complainant wrote a letter to the Director of Education for the Band, Mr. Patrick Bruyere, outlining her concerns with respect to the evaluation. This letter was reviewed by the School Board in consultation with Ms. Courchene. By letter dated April 16, 1993, Mr. Bruyere informed the complainant that the following decisions had been taken in her regard:

—She was to be given the opportunity to obtain her Bachelor of Education degree.

—As a result, the Board would not be offering her a teaching contract for the following school year.

—Upon successful completion of the Bachelor of Education degree, a teaching position would be available to her.

The complainant did not take advantage of this offer. She was paid until August 1993 and was not re-hired for the subsequent school year. Ms. Guimond then brought a complaint of unjust dismissal against her employer, and sought reinstatement, compensation akin to damages in an amount equal to her salary for the 1993-1994 school year, costs and interest. The employer raised the following objections:

i. The Adjudicator did not have jurisdiction to consider the complaint because there had been no dismissal of the complainant by the employer, as required by subsection 240(1) [as am. by R.S.C., 1985 (1st Supp.), c. 9, s. 15] of the Canada Labour Code. The employer alleged that the complainant had effectively resigned when she did not take up the employer’s offer to upgrade her education and instead asked for a letter of recommendation. Furthermore, according to the employer, the failure to renew the complainant’s contract for an additional year did not constitute a dismissal.

ii. The Adjudicator did not have jurisdiction to consider the complaint because the complainant had been laid off due to a lack of work or the discontinuance of a function, as contemplated by paragraph 242(3.1)(a) [as am. idem, s. 16] of the Canada Labour Code.

iii. Alternatively, the dismissal was not unjust. The employer’s requirement that employees have a Bachelor of Education was reasonable and its decision not to renew the complainant’s contract was thus justified.

The Adjudicator held in favour of Ms. Guimond on all three grounds and ordered the employer to pay the complainant an amount equal to her salary for the 1993-1994 school year. The applicant now applies to set aside the Adjudicator’s decision. The principal ground is that the Adjudicator acted without jurisdiction in concluding that the respondent Alma Jean Guimond had been dismissed from her employment.

STATUTORY PROVISIONS

The relevant statutory provisions are set out below:

240. (1) Subject to subsections (2) and 242(3.1), any person

(a) who has completed twelve consecutive months of continuous employment by an employer, and

(b) who is not a member of a group of employees subject to a collective agreement,

may make a complaint in writing to an inspector if the employee has been dismissed and considers the dismissal to be unjust.

…

2.42. (1) The Minister may, on receipt of a report pursuant to subsection 241(3), appoint any person that the Minister considers appropriate as an adjudicator to hear and adjudicate on the complaint in respect of which the report was made, and refer the complaint to the adjudicator along with any statement provided pursuant to subsection 241(1).

(2) An adjudicator to whom a complaint has been referred under subsection (1)

(a) shall consider the complaint within such time as the Governor in Council may by regulation prescribe;

(b) shall determine the procedure to be followed, but shall give full opportunity to the parties to the complaint to present evidence and make submissions to the adjudicator and shall consider the information relating to the complaint; and

(c) has, in relation to any complaint before the adjudicator, the powers conferred on the Canada Labour Relations Board, in relation to any proceeding before the Board, under paragraphs 16(a), (b) and (c).

(3) Subject to subsection (3.1), an adjudicator to whom a complaint has been referred under subsection (1) shall

(a) consider whether the dismissal of the person who made the complaint was unjust and render a decision thereon; and

(b) send a copy of the decision with the reasons therefor to each party to the complaint and to the Minister.

…

(4) Where an adjudicator decides pursuant to subsection (3) that a person has been unjustly dismissed, the adjudicator may, by order, require the employer who dismissed the person to

(a) pay the person compensation not exceeding the amount of money that is equivalent to the remuneration that would, but for the dismissal, have been paid by the employer to the person;

(b) reinstate the person in his employ; and

(c) do any other like thing that it is equitable to require the employer to do in order to remedy or counteract any consequence of the dismissal.

243. (1) Every order of an adjudicator appointed under subsection 242(1) is final and shall not be questioned or reviewed in any court.

(2) No order shall be made, process entered or proceeding taken in any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, to question, review, prohibit, or restrain an adjudicator in any proceedings of the adjudicator under section 242.

THE APPLICABLE STANDARD OF REVIEW

In the decision of the Supreme Court of Canada in U.E.S., Local 298 v. Bibeault, Beetz J. set out the two circumstances in which an administrative tribunal would exceed its jurisdiction because of error:[3]

1.   if the question of law at issue is within the tribunal’s jurisdiction, it will only exceed its jurisdiction if it errs in a patently unreasonable manner; a tribunal which is competent to answer a question may make errors in so doing without being subject to judicial review;

2.   if however the question at issue concerns a legislative provision limiting the tribunal’s powers, a mere error will cause it to lose jurisdiction and subject the tribunal to judicial review.

The first stage in the pragmatic or functional analysis proposed by the Supreme Court in Bibeault is to determine the tribunal’s jurisdiction. This involves asking the question: “Did the legislator intend the question to be within the jurisdiction conferred on the tribunal?”[4] In determining jurisdiction, the Court examines “not only the wording of the enactment conferring jurisdiction on the administrative tribunal, but the purpose of the statute creating the tribunal, the reason for its existence, the area of expertise of its members and the nature of the problem before the tribunal”.[5]

In Canada Post Corp. v. Pollard, the Federal Court of Appeal applied the functional analysis proposed in Bibeault to decide whether or not Parliament had intended the question of the interpretation of paragraphs 240(1)(b) and 242(3.1)(b) of the Canada Labour Code to be within the jurisdiction conferred on an adjudicator appointed under Part III of the Code.[6] After considering the ad hoc basis of the appointment of the adjudicators under the Code, the limited scope of their powers, as well as the statutory language limiting their jurisdiction, the Court of Appeal concluded that it was unable to find a legislative intent to entrust the adjudicator with the jurisdiction to interpret “virtually unchecked” paragraphs 240(1)(b ) and 242(3.1)(b) of the Code. The Court of Appeal held that the appropriate test for judicial review was that of correctness. In Byers Transport Ltd. v. Kosanovich, the Federal Court of Appeal reiterated that the standard of review of the interpretation by an adjudicator of paragraphs 242(3.1)(a) and 242(3.1)(b) was that of correctness.[7]

An essential pre-condition to an adjudicator’s jurisdiction to consider a complaint of unjust dismissal under subsection 240(1) of the Canada Labour Code is for the complainant to establish that he or she has been dismissed. The Federal Court of Appeal, in Srougi v. Lufthansa German Airlines, reviewed the meaning of “dismissal” and its significance as a pre-condition to the adjudicator’s jurisdiction:[8]

The dismissal is the implementation by the employer of his intention to unilaterally terminate the contract of employment binding him to his employee. This implementation may occur in various ways and there is no basis for thinking that in s. 61.5 [now ss. 240-246] the legislator intended to cover only one of them, even if that one was the most simple, direct or usual. Of course, the adjudicator must have before him a dismissal, that is to say, the employer’s actions must disclose a definite intention to unilaterally terminate the contract of employment (and that is all that was at the basis of the decision in Eskasoni School Board, supra), but once this is established there is in our opinion no question as to his jurisdiction. [Emphasis is mine.]

The determination of whether the respondent was dismissed by the applicant is thus a pre-condition to the Adjudicator’s jurisdiction. According to the decision of the Supreme Court of Canada in Bibeault and the jurisprudence reviewed above, the standard of judicial review on a jurisdictional question such as the interpretation of subsection 240(1) is one of correctness. Although the decision of an adjudicator appointed under the Canada Labour Code is protected by a finality clause, it is well established that the requirement that an administrative tribunal be correct in its interpretation of a jurisdiction-conferring statutory provision nevertheless applies.[9]

WAS THE RESPONDENT DISMISSED?

As recognized by the Adjudicator, the answer to the question as to whether the respondent was dismissed or not depends on the validity of the annual contracts which she signed over the years since 1983. If these annual contracts, and in particular the last one, were found to be valid, then the employer’s decision not to offer the complainant a position for the 1993-1994 school year was made in conformity with the terms of the contract and does not constitute a dismissal. Hence, the Adjudicator would have been without jurisdiction to hear the complaint.

The Adjudicator held that by requiring the complainant to sign an annual contract in 1983 despite having offered her a “permanent” teaching contract in 1981, the applicant arbitrarily altered the employment relationship “under the guise of termination of a contract and replacement”. The Adjudicator found that a refusal to sign the annual contracts would have invited termination, jeopardized the complainant’s career and caused hardship to herself and her family. He added that the inequality of bargaining power in favour of the employer made the employer’s unilateral alteration of the employment relationship “unconscionable”. Relying on the established body of case law relating to unilaterally imposed policy changes, the Adjudicator went on to conclude that:[10]

In my view, whether an employment policy is arbitrarily imposed or an employment relationship is arbitrarily altered under the guise of termination of a contract and replacement, the principles applied should be no different. Both are unconscionable and must not prevail.

The Adjudicator based this conclusion on the Manitoba Court of Appeal’s decision in Wiebe v. Central Transport Refrigeration (Man.) Ltd.[11] In Wiebe, the Court considered whether the breach by a long-time employee of an employment policy implemented after he had commenced employment could warrant his termination. Relying on established jurisprudence in this area, the Court of Appeal held it did not on the basis that the employee had not agreed to the change in policy. Specifically, it held that the inequality of the bargaining position of the employer and the employee placed a heavy onus on the employer to establish that the plaintiff had agreed to the policy, and that this onus had not been met.

In reaching its decision, the Court of Appeal reviewed the case law regarding the imposition of employment policies on employees. In Hill v. Peter Gorman Ltd., the plaintiff salesman had been employed by the defendant employer under a contract which fixed his remuneration by reference to a stipulated rate of commission on net sales. The contract, which provided for an indefinite employment terminable on two weeks’ notice, also contained a restrictive covenant (applicable for one year following termination) in respect of the area of employment. The employer subsequently began to withhold 10% of commissions earned by the plaintiff and other salesmen as a reserve for bad debts. The plaintiff complained periodically about these deductions, but remained in the defendant’s employ for a year after they began. The plaintiff then sued to recover the withheld commissions. The Ontario Court of Appeal, per Mackay J.A., held that:[12]

... it cannot be said, as a matter of law, that an employee accepts an attempted variation simply by the fact alone of continuing in his employment. Where an employer attempts to vary the contractual terms, the position of the employee is this: He may accept the variation expressly or impliedly in which case there is a new contract. He may refuse to accept it and if the employer persists in the attempted variation the employee may treat this persistence as a breach of contract and sue the employer for damages, or while refusing to accept it he may continue in his employment and if the employer permits him to discharge his obligations and the employee makes it plain that he is not accepting the variation, then the employee is entitled to insist on the original terms. [Emphasis is mine.]

The Court in Wiebe also reviewed the decision of the British Columbia Supreme Court in Pronovost v. Northwest Accept. Corp.[13] In Pronovost, the plaintiff employee was dismissed summarily and given only two weeks’ severance pay. The employer relied on a provision in its company personnel manual, known to the plaintiff, which stated that it was not company policy to pay severance pay. The employer’s position was that once the employee had become aware of the policy, he must be taken to have agreed to it when he continued in the same employment despite the change. In dismissing the employer’s arguments and deciding that the plaintiff was entitled to reasonable notice or salary in lieu of notice, the Court stated:[14]

I just cannot accept that unrealistic position. To object to the policy would be to invite termination. I repeat what I said in Bradbrooke v. Eaton Yale, [1982] B.C.W.L.D. 2298, B.C.S.C., Vancouver No. C820989, 18th November 1982 (not yet reported):

It is the position of counsel for the defendants that the plaintiff is bound by the policy outlined in the handbook. I cannot agree with that proposition and that would be so even if the plaintiff had read and understood the pertinent section of the handbook when received in 1978-79.

In the absence of a contractual arrangement, the plaintiff was entitled at common law to reasonable notice or salary in lieu of notice. The employer cannot unilaterally deprive him of that common law right. [Emphasis is mine.]

The last decision reviewed by the court in Wiebe was that of Starcevich v. Woodward’s Ltd.[15] The defendant employer argued that because the employee had been aware of the company policy regarding severance, and had even applied it to other employees, the policy had become a term of employment. The Court dismissed this argument and held:[16]

If the defendant is correct in saying that the 1987 severance policy became a term of the plaintiff’s employment when it was promulgated, then, in my view, the defendant is saying that it had the right to unilaterally impose a new term of employment on the plaintiff long after the initial hiring. I know of no theory of contract law which suggests that one party can unilaterally impose a contractual term on the other, unless the other agrees to accept that term as a term of his or her contract.

In this case, the defendant says that the plaintiff accepted the policy as a term of his employment. In support of that statement, the defendant points to the fact that the plaintiff was aware of the policy, and that he in fact applied the policy to others during the course of his employment.

In my view, neither of those facts establishes, on balance, that the plaintiff accepted that policy as a term of his own contract of employment. The plaintiff may well have had to deal with the dismissal of employees as part of his job description, and if there was a policy in effect, no doubt he was required to apply that policy. It does not follow that by applying the policy he must be taken to have accepted that he was legally bound by the policy in the event of his own dismissal. There would have to be clear and unequivocal evidence to establish that the plaintiff had agreed to the policy forming part of his own contract of employment. Such clear and unequivocal evidence does not exist in the material before me. [Emphasis is mine.]

The rule established by these decisions is therefore quite clear. An employment policy introduced by an employer does not become a term of the employment contract unless and until it has been clearly agreed to by the employee. Knowledge of the policy by an employee while he or she continues in the same employment without asserting any objection will not necessarily be construed as acquiescence particularly where a denunciation of the policy could invite termination. However, as is explicitly stated in each of the cases referred to in Wiebe, if there is clear and unequivocal acceptance of the policy as a term of employment, the policy is binding on the employee.

How is this principle to be applied to the case at bar? In 1983, the applicant informed its employees that it would be requiring them to sign annual contracts with the School Board, notwithstanding the fact that they had originally been engaged under contracts of an indeterminate duration. Clearly, this action on the part of the employer was an attempt to vary the contractual terms of employment. What then were the options open to the respondent? As noted by the Ontario Court of Appeal in Gorman, supra, it was open to her to accept the variation in which case a new annual contract came into existence. It was also open to the respondent to refuse to accept the variation. If the employer persisted and refused to continue her employment for failure to abide by the unilaterally imposed term as the Adjudicator envisaged, she could then have sought the appropriate remedy for unjust dismissal. This remedy would have been available whether the respondent had been terminated outright, or under the guise of a refusal to continue her employment for the subsequent school year.[17]

However, by signing the first annual contract and each one thereafter over a ten-year period, the respondent consented, in the clearest way possible, to the variation to the contract proposed by her employer. Assuming that this consent was validly given, a new employment contract, with a one-year duration, came into existence and replaced the preceding one. It is therefore apparent that this is not a case of an employee confronted by a unilaterally imposed policy change which has not been expressly accepted as in Wiebe, Gorman, Starcevich or Pronovost. The annual contracts signed by the respondent year after year evidence her acceptance in the clearest way known to law and therefore bind her to the fullest extent. The Adjudicator therefore erred in failing to take note of this acceptance and in holding that the matter could be decided by reference to the principle developed in the aforementioned cases.

If, on the other hand, the Adjudicator’s decision can be read as holding that the respondent should nevertheless be relieved from her contract on the sole ground that her bargaining position was inferior to that of the employer, then it is entirely without legal foundation.[18] Bargaining positions are rarely if ever equal in any given contractual relationship. In the context of employment contracts, the employer usually has the stronger bargaining power. That, as such, has never been held to be a ground for allowing an employee to repudiate the terms of a contract. The Adjudicator was obviously concerned by the fact that, in his view, a refusal by the respondent to accept the contractual modification in 1983 might have led to her termination. But even if that be so, she was entitled to reasonable notice and no one could have taken that right away from her if indeed she had decided to exercise it. Instead of exercising that right, she opted to accept the contractual modification. That is the choice that she made.

I would add that in assessing whether there was anything “unconscionable” about the circumstances in which the respondent made that choice, as the Adjudicator suggests there was, it must be remembered that there is no legal entitlement to permanent employment. An employer may terminate employment of an indeterminate duration at any time, just as an employee may quit such employment at any time, provided that in either case reasonable notice be given. In the same vein, an employer may attempt to change the fundamental terms of an employment contract, in which case an employee may accept or refuse to adhere to such changes. If the employee does refuse, the employer cannot compel acceptance. However, the employer retains the right to terminate the employment provided that reasonable notice is given. That, it seems, is the context in which the respondent found herself in 1983. Rather than insisting on her contractual rights, she chose to adhere to the modified terms of employment. That choice was made freely and it cannot be said that there was anything “unconscionable” about the circumstances in which it was made.[19]

Having decided that the annual contracts were binding on the complainant, it follows that the applicant’s decision not to renew the last contract for the 1993-1994 school year was made in conformity with its terms and does not result in a dismissal within the meaning of subsection 240(1) of the Canada Labour Code. As such, the case falls squarely within the ambit of the decision of the Federal Court of Appeal in Eskasoni School Board and Eskasoni Band Council v. MacIssac et al.,[20] where it was held that a decision not to renew a contract for a fixed term of employment did not constitute a dismissal.[21]

As the complainant was not dismissed, the Adjudicator lacked jurisdiction to consider the complaint under section 242 of the Canada Labour Code, and on that ground his decision is set aside.

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