Fixed-term Contracts in Canada

What is a Fixed-term Contract?

A fixed-term contract in Canada is a job agreement between you and your employer that lasts for a specific period of time, with clear start and end dates. Unlike a permanent job, a fixed-term contract has a predetermined end date.

Watch the video below from the Employment Law Show and read on to learn more about fixed-term contracts and your rights in Canada.

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How do they benefit an employee?

With a fixed-term contract, an employee has steady employment for a known period. You also have rights like getting paid at least the minimum wage, having set working hours, and getting paid holidays.

A fixed-term contract can be common for seasonal jobs, project-based work, or covering for someone on a long-term leave.

This type of contract is backed by government legislation and Canada’s court system to ensure fair treatment at work.

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Ending fixed-term contracts early

If your employer ends your fixed-term contract early without cause or without a termination clause in the contract, they must pay you for the remaining time left on the contract.

This compensation includes wages and potentially other benefits that you would have received had the contract run its full term.

• Example: A non-unionized automotive worker was working on a 12-month fixed-term contract, earning $4,000 per month. Their contract was terminated after six months. They could potentially be entitled to $24,000 (i.e., $4,000 x 6 months) as compensation for the early termination.

Some employers may include a termination clause in their fixed-term contracts to minimize the compensation owed to the employee if they end the contract early. However, these clauses are often unenforceable for various reasons, including the way they are written or because of a change in legislation. This means that you may still be entitled to a significant amount of compensation.

You should always talk to an employment lawyer at Samfiru Tumarkin LLP to determine your rights to compensation if your employer cancels your contract early, and how to obtain it.

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Working after your contract ends

If you keep working after your fixed-term contract’s end date, you may be considered a regular employee of the company. In other words, your contract becomes an indefinite-term contract.

An employee who is fired after their fixed-term contract becomes an indefinite-term contract will be owed a full severance package – as much as 24 months’ pay.

How is severance pay calculated?

The amount of severance you are entitled to in Canada is calculated using several factors, including:

• Age

• Length of service

• Position at the company

• Ability to find new work

To figure out how much you could be owed, use our firm’s free Severance Pay Calculator. It has helped millions of Canadians determine their severance entitlements after losing their job.

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Successive fixed-term contracts

If you work many fixed-term contracts one after the other for the same employer, the law might view you as a permanent, indefinite employee. If they fire you or let you go, you could be entitled to a proper severance package.

Some employers use ongoing fixed-term contracts to avoid severance payments.

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Lost your job?

The employment lawyers at Samfiru Tumarkin LLP can provide valuable assistance if you lose your job during or after a fixed-term contract.

We are uniquely skilled in employment law and can help you understand your legal rights and entitlements.

Whether you’re negotiating a fixed-term contract, disputing a change to the agreement, navigating a severance package after the end of multiple contracts, or seeking legal recourse for other reasons, our experienced team can provide expert guidance and representation to protect your interests during this challenging time. We have generated proven results for tens of thousands of clients across Canada since 2007.

If you work in Ontario, Alberta or B.C., our employment lawyers are here to resolve your workplace concerns. If you’re a non-unionized employee who has lost your job, contact us online or at 1-855-821-5900 to get the advice you need and the compensation you deserve.