explain your understanding of the case in your own words and reflect on the decision taken. If possible, provide alternative decisions.

CASE IN POINT Changing Employment Terms Mid-Stream Wronko v Western Inventory Service Ltd, 2008 ONCA 327, 2006 Canlll 34211 proper notice to the employee. The court therefore dismissed the wrongful dismissal claim. Wronko appealed. Relevant Issue Whether an employer is able to unilaterally change a fundamental term of an employment agreement simply by providing advance notice of the change to the employee. Facts Wronko began working for Western, a Toronto-based inventory service provider, in 1987, and by 2004 he was vice-president of sales. With each promotion he executed a new employment agreement. The last contract, signed in De- cember 2000, provided for a generous severance package of a lump-sum payment of two years' salary upon termination without cause. In 2002, Western's new president decided that Wronko's contract should be amended, and he presented Wronko with a draft agreement that provided him with only seven months' severance if terminated without cause. After seeking legal advice, Wronko refused to sign this amended agreement. On September 9, 2002, Western responded with a letter stating that the new contract would take effect in two years' time. Wronko made it clear that he still did not accept the change, but he continued working. Two years later, West- ern wrote Wronko a letter that stated: Effective September 9, 2004, the terms noted in the employment agreement... apply and are in full force and effect. If you do not wish to accept the new terms and conditions of employment as outlined, then we do not have a job for you. Decision The Ontario Court of Appeal unanimously found for Wronko. It held that where an employer attempts to make a unilateral and fundamental change to the terms of an existing employ- ment agreement, and the employee clearly rejects that new term, the employer must do more than provide advance notice of the change. It must also advise the employee of the consequences of rejecting it. In this instance, Western could have done this by explicitly telling Wronko that if he refused to accept the new terms, employment under the terms of the existing contract would terminate at the end of the working notice period (September 2004). At the same time, it could have offered to rehire him under the new terms, starting at the end of the working notice period. However, because Western had allowed him to continue working in these circumstances without notifying him of the consequences of this decision, Wronko could legally insist that the notice was ineffective. Therefore, by the letter of September 2004 Western effectively terminated Wronko and he was en titled to wrongful dismissal damages. The Court of Appeal awarded Wronko two years' termination pay in lieu of notice ($286,000) pursuant to the terms of his existing employment contract. Western's leave to appeal to the Supreme Court of Wronko again refused the new terms and, taking the position that the employer's letter effectively fired him, sued for wrongful dismissal. At trial, the employer argued that it had met its legal obligations by giving Wronko two years' notice of the change and that by not attending work after that, Wronko had resigned. The trial judge agreed. Under the common law, Western had the legal right to vary even a fundamental term of the contract-in this case the termination clause-upon Canada was dismissed with costs. Scanned with CamScanner