On February 1, 2016, Justice Lukasz Granosik of the Quebec Superior Court issued an interesting decision on the application of the terms of a fixed-term contract after the tacit renewal of the employment contract for an indeterminate mandate. However, according to previous case law in this regard, the Court found that tacit renewal applies only to the essential conditions of the agreement and specifies that this includes the worker`s salary or working time. Nevertheless, in an unprecedented decision, the Court concluded that confidentiality clauses, non-invitation clauses and other restrictive agreements are not essential conditions of the employment contract. In short, and to the extent that the worker`s obligations of confidentiality and non-registration exceed the legal duty of loyalty under section 2088 of the Civil Code of Quebec, these obligations are not applicable. This decision really shows how dangerous it is for an employer to allow a worker to work beyond the end of the term of work on a fixed-term contract. First, it is clear that this decision has set an important precedent, given that confidentiality clauses, non-invitation clauses and non-competition clauses will not be applicable in the event of tacit renewal of the employment contract. Therefore, when an employer hires a worker, there is an urgent need to determine whether it is advantageous to enter into a fixed-term contract or whether an unspecified futures contract can be safer. In January 2000, Employee Danny Kennel of Traffic Tech Inc. ("Traffic Tech") was hired as a transportation specialist. He signed a three-year fixed-term employment contract with an extension clause that "the employer makes available to the worker, at least sixty days before the expiry of the contract, a notification of renewal or non-renewal of the contract. The extension would be for one year and one year to the next, as the parties see fit.
The employment contract also contained a confidentiality clause and a clause prohibiting solicitation of employees and customers. At the end of the three-year period, Traffic Tech did not send an extension or non-renewal notification to the employee, but the employee continued his or her work. In 2004, the contracting parties signed a new three-year fixed-term employment contract (the "agreement"), which contained the same extension clause and the same confidentiality and non-claim clauses. Since the agreement had not been renewed in accordance with the extension clause, but that the worker had continued to work more than five days after the deadline had expired, the worker`s employment was tacitly renewed for an indeterminate mandate, in accordance with section 2090 of the Civil Code of Quebec (C.C.Q.).