The Devil is in the Details When it Comes to “Fixed-Term” Employment Agreements
The Court recently provided further clarity to the area of “fixed-term” employment agreements with their recent decision in Lee v Choice Bank Limited. In this case, the employee had entered into a three-year fixed term employment agreement (“EA”) with the Defendant employer Bank to act as its President. The EA stipulated that her employment would automatically be renewed for periods of one year, unless either party provided the other with written notice of non-renewal no later than thirty (30) days prior to the end of the initial employment period. Upon terminating the employee without cause, with less than (30) days’ notice, the employee took the position that since she had not been provided with reasonable notice, her employment had automatically been renewed for an additional year. The Court agreed, holding that there was no ambiguity in the contract and that the EA had, in fact, automatically renewed. This case further underlines the importance for employers to provide fixed-term employees with clear and unambiguous termination language to avoid unintended (and expensive!) consequences.