In LaPlume v. AAA Internet Publishing Inc., 2025 BCSC 2139, the BC Supreme Court considered whether the termination clause in an employment contract was still enforceable despite changes to an employee’s job made over the course of his nine and a half years of employment.
Background
AAA Internet Publishing Inc. (the “Employer”) and the employee signed an employment contract in December 2013 (the “Contract”). The employee was hired as a junior developer, and the Contract stated that the Employer could change the employee’s position, title, duties, responsibilities, or reporting relationship as the Employer deemed appropriate and such changes would not breach the Contract.
Some changes did in fact occur during his employment. Between 2013 and 2020, the employee received incremental salary increases, but his duties and responsibilities did not change.
In 2021, the employee became a manager. His responsibilities were largely the same, except he was now also responsible for a small team of new hires. The employee received a raise, but his hours, location of work, and reporting manager remained the same.
In 2022, the employee became an operations manager. In this new role, the employee was responsible for helping new hires learn how to do game configurations. The employee received a raise, but he continued to perform his junior developer duties and kept his same hours, location of work, and reporting manager.
In July 2023, the Employer terminated the employee’s employment without cause and paid the employee 16 weeks’ pay in lieu of reasonable notice, in accordance with the terms of the Contract he signed at the time of hire.
The employee took the position that the Contract (and the termination clause) was no longer enforceable due to the changes which occurred over the course of his employment. He commenced an action for wrongful dismissal seeking additional damages.
The Court Confirmed the Contract Still Applied
The issue before the court was whether the Contract remained enforceable. The employee argued that the changes in his employment between 2013 and 2023 were so significant that the foundation of the Contract was altered and the termination clause no longer applied.
The Court disagreed. The Court concluded the changes in employment were not so fundamental and significant that the foundation of the Contract eroded. The Contract continued to apply, despite the changes over time.
The changes were consistent with the employee’s expectation when he signed the Contract. In particular, the Contract stated that the employee’s employment was expected to evolve with his qualifications, skills, and experience. That is exactly what happened.
The Court noted that in order for the substratum to be eroded the changes at issue must be “dramatic and fundamental.” Where the contract already anticipates or permits changes, the changes necessary to give rise to a substratum argument needs to go beyond what was already anticipated or permitted.
In the end, there was no breach of contract or wrongful dismissal as the Employer met its obligation to the employee by complying with the termination clause.
Key Takeaways
Although significant changes can lead to an erosion of the substratum of a contact, this case demonstrates that something more than incremental, permitted or anticipated change will be required to meet that threshold. Employers can limit risks in this area by utilizing contracts that anticipate changes over the course of the employment relationship, and by amending contracts during the employment relationship where truly significant or fundamental changes do occur.
If you have any questions about this article, please contact your Harris lawyer.
