Landing a job is a significant milestone for anyone. It can be a stepping stone to success and financial security. However, sometimes employees find themselves in situations where their employment contract does not reflect their actual job duties. This can be particularly problematic when it comes to job security, benefits, and legal issues such as termination. In this article, we will discuss what you should do if you find yourself in such a situation.

Understanding the Nature of Your Employment Contract

A written employment contract is a legal agreement between an employer and an employee. It outlines the terms and conditions of the employment relationship, such as the nature of the work and responsibilities, and terms of compensation. It serves as a basis for the employer-employee relationship, and their respective obligations.

However, if the nature of the job changes significantly over time, the original employment contract may no longer accurately reflect the current situation. For example, if you were hired as a receptionist but later promoted to manager, your job duties and responsibilities would have changed so significantly that the original employment contract you were hired might no longer reflect your actual job, and could potentially be voided.

A good illustration comes from the case of Celestini v. Shoplogix Inc., 2023 ONCA 131.  In 2005, Mr. Celestini signed an employment agreement as the CTO of Shoplogix Inc. (“Shoplogix”).  His duties included those that would regularly be carried out by that office as set out in company policies. They did not include sales, travel, infrastructure responsibilities, or financing. However, after a significant restructuring, Mr. Celestini’s duties changed to include sales and marketing, significant international travel, managing infrastructure, and soliciting investors. His compensation also increased significantly through a newly introduced bonus structure. A new written employment agreement was never put in place outlining the new terms of Celestini’s job duties and compensation. In 2017, Celestini was terminated without cause and Shoplogix relied on the 2005 employment contract terms to say he was entitled to 12 months on termination.

Celestini sued Shoplogix for wrongful dismissal, claiming that he was not limited to the 12 months, but entitled to common law reasonable notice.  He claimed that the applicable reasonable notice period should be substantially higher than the 12 months, based on the usual considerations such as his age, seniority, length of service and other factors. The basis of his claim was that his job duties had so significantly changed over time that the very foundation or “substratum” of the employment contract had disappeared, thereby nullifying the contract, and the termination clauses relied on by the employer. The judge hearing the motion for summary judgment agreed, and applied the doctrine of “changed substratum” to nullify the employment contract.

The motion judge granted Celestini an additional 6 months, or 18 months total, compensation in lieu of notice, comprised of his base salary, incentive bonus compensation, and other benefits over this period. Therefore, in addition to the 12 months’ salary and pro-rated bonus in 2017 already paid by Shoplogix, Celestini was granted an additional $421,043.05 plus pre-judgment and post-judgment interest by the motion judge. The Court of Appeal upheld the motion judge’s findings, except that it allowed Mr. Celestini’s cross-appeal and increased the award by $37,188.61 as the 2017 formula used to calculate Mr. Celestini’s bonus differed from the one used in the 2005 employment agreement.

Key Takeaways for Employees

If you find yourself in a situation where your employment contract does not reflect your actual job duties, there are several key takeaways you should keep in mind to protect yourself.

1. Review your employment contract regularly, especially if your job duties have change. This can help prevent any misunderstandings or disputes down the road.
2. Understand your legal rights upon termination. If you are terminated after changes in your role, it is critical to assess whether your employment contract is still enforceable. If your job duties have been significantly changed but your contract has never been amended accordingly, it is likely void. In that case, you are likely entitled to reasonable notice under common law, which is much longer than the statutory notice. Understanding your legal rights can help you make informed decisions about how to proceed to achieve the best outcome.
3. Seek Legal Advice. If your job duties have changed, when you have been terminated or are facing other legal issues related to your employment contract, it is advisable to seek legal advice. A qualified employment lawyer can review your contract, provide guidance on your legal rights and options, help you negotiate a fair settlement, and navigate you down the road of litigation.