In Wideen v Tourism Calgary (Calgary Convention & Visitors Bureau), 2026 ABKB 656, the Alberta Court of King’s Bench found that the termination clause contained in an employment contract entered after 10 years of employment ousted all prior service.
This case is clearly a win for employers. Respectfully, however, I have some difficulty with the reasoning in this case.
Facts
The following were the pertinent facts summarized by the ABKB:
- The plaintiff employee Roxanne Wideen was employed by Tourism Calgary for 37 years when her employment was terminated without cause
- The employee had 3 employment contracts over her career, but the two key ones were her original contract as a bookkeeper and the one she entered over 9 years later when promoted to Finance Coordinator
- The original bookkeeper contract had no termination clause
- The Finance Coordinator contract contained a termination formula: 1 month notice / severance for each completed year of service
- The Finance Coordinator contract referenced that her employment was continuing and referenced her original employment commencement date in 1987. However, the termination provision does not state what date is to be used as the start date for calculating termination entitlements under the contract
- The employee’s position materially changed when she was promoted to Finance Coordinator
- Applications Judge Farrington found the employment contract operated to provide her with 1 month per year of service for each year completed after signing the Finance Coordinator employment contract. This resulted in severance pay of 27 months, instead of the 36 months claimed
- She appealed (this summarized decision), arguing that the Finance Coordinator termination clause ought to have been interpreted to calculate her start date from her original start date with Tourism Calgary, resulting in 36 months’ severance
Analysis / Conclusion
The Court of King’s Bench upheld Application Judge Farrington’s interpretation of the Finance Coordinator contract termination clause and awarded 27 months’ severance.
The reasoning was effectively that there was no language in the Finance Coordinator contract which linked the termination clause to the original hiring date. The interpretation adopted by the Court was as follows:
[26] […] A reasonable person reading the agreement as a whole would understand that the parties had chosen to introduce a termination entitlement in 1997. Nothing in the agreement objectively communicates that the parties intended the newly introduced formula to be calculated by reference to the preceding decade of service.
My Take
Normally, a plaintiff in this situation would argue the clause violates the Employment Standards Code and would sue for reasonable notice. There is a good argument this one violates the ESC. However, typical maximum reasonable notice is 24 months, and even on KB’s interpretation of the termination clause she ended up with more than that. That argument was therefore not the main point of this case.
Before commenting further, I will respectfully point out a few well-established principles:
- There is an implied term in all employment contracts that employees are entitled to reasonable notice of dismissal
- On the date this termination clause was entered into, if enforceable, it ousted the employee’s implied right of reasonable notice in exchange for the termination formula. She had already accrued over 9 years of service at that point
- Where there is any ambiguity in an employment contract, it must be construed strictly against the interests of the employer and in favor of the interests of the employee
- Employment contracts must be interpreted to find their objective meaning. Extrinsic evidence of the reasonable expectations of the parties is relevant and admissible but cannot overwhelm the text of the agreement
- The meaning of an employment contract is determined at the date it was entered into
There is no disputing that the new contract did not explicitly say it was tying the termination formula to the original hire date. However, it also did not explicitly say it was tying the termination formula to the new contract date. I think there was a strong argument this creates an ambiguity and contra preferendum should have been triggered. I would also argue that even without contra preferendum the reasonable expectations of the parties would favor the interpretation advanced by the plaintiff.
If KB’s interpretation of the termination clause is correct, I think it means that on the day the employee accepted the Finance Coordinator contract, she was agreeing to forfeit her considerable accrued common law reasonable notice in exchange for zero severance. The clause provided 1 month for each completed year of service, so on day one she had no completed years, which means zero severance. Respectfully, I have trouble seeing that result would have been among the reasonable expectations of the parties.
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