Legal Blog

Changed Substratum

Celestini v. Shoplogix Inc. 2023 Ont CA

An employment agreement may properly set out the notice to be given to a terminated employee. However, if, during the period between the date of the agreement and termination, the employment duties changed so significantly that it can be said that the parties could not have intended the employment agreement to apply to the new circumstances, then the employment agreement no longer binds and common law notice governs. This is known as the changed substratum doctrine. In this case, the court held that the employment duties changed so significantly that the 12-month notice period in the agreement could not stand and that 18 months was more appropriate.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.