27 Dec How is an employee affected if a fixed-term employment contract ends early?
If you have agreed to a fixed-term employment contract, this means that you know the duration your employment will last, and thus, are aware of your termination date. But what happens if your term ends early?
If an Employee Wants to Resign
You may have begun this new job, realized that it is not the right fit, and now want to terminate your employment before the contract period is over. You may provide your employer with reasonable notice and resign from this employment, even though you are ending a fixed-term contract. However, there are situations where resigning from a fixed-term contract can become complicated.
If your contract outlines that you may resign at any point of the contract, then you are free to give your employer your notice without any complications. The contract indicated that the employer must accept your resignation, which means legally, the employer must respond accordingly.
If you signed a contract without any indication that you may resign before your contract period ends, resigning becomes more complex. If you resign before the end of your contract, you may be responsible for a breach of contract. This breach of contract can result in your employer suing for damages. This is not common, however, if the employer can prove that severing this employment relationship early results in foreseeable damages to the court, the employer can sue the employee for compensation.
If an Employer Terminates Prior to the Termination Date
Your employer may terminate your employment before the end of your fixed-term contract however, they will owe you compensation upon termination. If your employer included a termination clause in the Employment Contract, meaning that the amount owed upon early termination was included in the original contract, then that is the amount you will be legally owed.
However, if a termination clause was not included in your fixed-term contract and the employer terminates the employment early, they are legally required to pay in lieu of notice and compensate the amount due for the remainder of the contract. This means that upon termination, the employer will owe you the amount of pay you would have received from your early termination date until the end of the original contract.
If you have any questions about your Employment Contract or resigning from your current job, please contact KCY at LAW by filling in an online consultation request or contact us by phone at 905-639-0999 to book your consultation today.