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No Summary Judgment for Employer in Wrongful Dismissal Case


In the recent decision in McKinstry v. Stone, 2011 ONSC 5544, the Court dismissed the employer’s motion for summary judgment on the issue of reasonable notice because the employment agreement referred a “policy booklet” and “standard code of ethics guide”, and these were not produced at the motion.

This illustrates a common problem.  It is not unusual for employers to make reference to other documents in their employment agreements, whether it be policies, non-competition agreements, confidentiality agreements, etc.  The risk, from an employer’s perspective, is that termination provisions that might seem clear in the employment agreement can be rendered ambiguous (and possibly even unenforceable) by these other documents.  In many cases, a better practice is not make specific reference to external documents at all, other than (perhaps) to state that the employee will comply with the employer’s policies and procedures in effect from time to time. 

If the employer needs an employee to sign a confidentiality agreement, for example, provide the confidentiality agreement at the time of hiring and don’t bother referring to it in the employment agreement. 

It is worth reading the decision of the court on this point, to drive it home: 

[15]           The Defendants have the burden of proving that Mr. McKinstry has been paid his full legal entitlement arising from his wrongful dismissal from employment without cause.  In order to do so, the Defendants must prove what that entitlement of Mr. McKinstry is.  They submit that it is the amount set out in the termination provision of the Agreement.  They must therefore prove what the specific terms of the Agreement are with respect to Mr. McKinstry’s entitlement.  Mr. McKinstry submits that in order to do so, the Defendants must produce the entire Agreement in its motion record.  This includes the documents referred to in the Agreement.  The Defendants have not produced the policy booklet and standard code of ethics guide which is referred to in the Agreement.  It is argued that it is therefore not possible to properly interpret the termination provision of the Agreement as this Court does not have access to the entire Agreement, which includes these documents.

[16]           I agree with this submission.  To succeed on this motion, the Defendants have a burden of proving that they are entitled to a dismissal of Mr. McKinstry’s claims for damages in wrongful dismissal arising from the failure to provide reasonable notice or pay in lieu thereof.  I agree that they cannot satisfy this burden of proof without establishing what the terms of employment were with respect to termination of employment.  This is a basic requirement that the Defendants must meet and they have not done so.  This is particularly so, in light of the conflicting evidence and submissions of the parties with respect to the effect that two employee manuals distributed after the date of the Agreement may have on the Agreement, as they contain what appear to be different termination of employment provisions.  The entire manuals were not produced by the Defendants.  Mr. McKinstry produced only excerpts of these manuals.  I find that the Defendants have not satisfied their burden of proof on this summary judgment motion with respect to wrongful dismissal claim regarding the failure to provide reasonable notice.  The motion for summary judgment on the wrongful dismissal claim is therefore denied.

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