By Clarence Bennett, K.C., ICD.D, Mark Heighton, and Emma-Jean Griffin

The recent decision in Gbongbor v Multicultural Association of Fredericton (“Gbongbor”)^[1] from the New Brunswick Court of King’s Bench offered clarity on several sticky employment issues:

• When is an employee on a fixed-term contract?
• What happens if an employee has fully mitigated their damages?
• To what extent can there be parallel proceedings in Court and the Human Rights Commission?

The plaintiff in this case was an employee of the Multicultural Association of Fredericton (“MCAF”) for several years under various fixed-term contracts. His contract was ultimately not renewed in March 2023 due to performance concerns. The plaintiff brought a wrongful dismissal claim, alleging that his termination was linked to racial and social discrimination. He also filed a complaint with the New Brunswick Human Rights Commission (the “HRC”).^[2]

In response, the employer filed a motion for summary judgment, arguing that it was not a dismissal because the employee’s contract had ended, even if it was a dismissal the plaintiff had fully mitigated, and to the extent there was overlap with the Human Rights complaint, those claims were barred. Justice Morrison of the Court of King’s Bench agreed on all points and granted summary judgment.

Fixed-term contract

When an employee is on a fixed-term contract, as opposed to indefinite employment, they are generally not entitled to damages when the contract expires because they have not been “wrongfully dismissed”. As a result, a dispute often arises as to whether the employee was in fact subject to a fixed-term contract.

In Gbongbor, Justice Morrison summarized some of the key factors to consider:

[22] […] In concluding that the plaintiff was employed under a fixed-term contract, the Court considered factors such as:

(1)        Gaps in employment between contracts;

(2)        Contracts of differing lengths, salary and position; and

(3)        The terms were negotiated.^[3]

In Gbongbor, the plaintiff entered a series of yearlong fixed-term contracts that set out an explicit start and end date and provided for automatic termination unless an extension or renewal was agreed in writing. The plaintiff was employed full-time from 2016 to 2023 (and on a part-time basis for almost a decade prior) under these fixed-term contracts. 

There were two key considerations that led Justice Morrison to conclude there was a fixed-term contract in this case. The first was the uncontradicted evidence that the employee was aware and accepted that his employment was on a fixed-term basis. The second was that the MCAF relied on external funding for its operations and therefore had no certainty that it could offer indefinite contracts because that funding could vary from year to year. This was standard practice within the organization.^[4]   

That funding issue experienced by the MCAF arose at the onset of the COVID-19 pandemic, during which the plaintiff was offered short-term contracts as opposed to his usual yearlong contracts. This was because of the uncertainty caused by the pandemic. This fact was a key reason why Justice Morrison held that a fixed-term contract existed and, as a result, the employee had not been dismissed.

Mitigation of damages

A dismissed employee has an obligation to seek alternative employment after dismissal. The Gbongbor case shows what happens when that employee is entirely successful in doing so – they are not entitled to damages for that wrongful dismissal.

Justice Morrison in this case held that even if the plaintiff had been dismissed, he had fully mitigated his damages because he found alternative higher paying employment and the MCAF had made several payments after the dismissal.^[5] The result was that any damages he might have suffered were mitigated.

This is a useful precedent for employers because there is limited case law dealing with employees that have “fully” mitigated, but it is also applicable in situations where partial mitigation has occurred and the replacement employment is at a higher wage. In those circumstances, the new income subtracts from any damages that were incurred from the loss of the previous employment.

Issue estoppel

This case confirms a fundamental point: employees need to pick a lane after dismissal. When allegations have already been put before a competent decision maker (such as the HRC), issue estoppel prevents those allegations from being adjudicated again in a different forum.

The plaintiff in this case had previously filed a complaint with the New Brunswick Human Rights Commission alleging discrimination and harassment. The HRC investigated and dismissed those allegations on their merits. The Court held that this prior adjudication engaged the doctrine of issue estoppel and so the plaintiff was prevented relitigating the same issues in civil court.^[6]

There has been a trend in recent years in several Canadian jurisdictions to recognize a tort of “harassment” – a claim that has generally been within the purview of the various Human Rights Commissions and tribunals. Justice Morrison avoided going down that road, and instead assessed the allegations based on the similarly to the Human Rights allegations. Having concluded that the allegations were “essentially the same” he found that issue estoppel applied, and those claims were barred.

For both employers and employees, this case is a reminder that clear contracts, communication, detailed documentation, and understanding legal obligations can prevent costly disputes and ensure fair outcomes.