Many employers include termination clauses in employment contracts to limit their liability when dismissing employees. When employers draft generous termination provisions providing for more than statutory minimums, they must follow through on that generosity when terminating employees. Failing to do so could leave employers exposed to full liability under the common law.
Has an employee who hands over his keys and company cell phone to his employer and declares “I’m done” resigned their employment? The Newfoundland and Labrador Court of Appeal has said that, in at least one case, the answer is no.
A business’ obligations to its workers will depend on whether the workers are employees or independent contractors. However, a recent decision reminds us that, even where a worker is a true independent contractor, this distinction may not preclude a business being liable to third parties, such as customers, when the worker does something wrong.