Executive Summary: Key Legal and Evidentiary Issues

• MacDonald was found to be an employee, not an independent contractor, entitled to common law notice of termination.

• Summary judgment was appropriate due to minimal factual disputes and a sufficient evidentiary record.

• A 22-month notice period (less 3 months’ working notice) was upheld as within the appropriate range.

• The court found no failure to mitigate where the re-employment offer included broader duties and a release of claims.

• No damages for bad faith or unfair dealing were awarded as no animus was established.

• The $11,000 costs award was upheld, considering the settlement offer exceeded and the court’s discretion properly applied.

Facts of the employment relationship and dismissal

Randi MacDonald worked for the Saskatoon Minor Basketball Association (SMBA) for 16.5 years, advancing from a part-time administrative assistant to executive director. Throughout this period, SMBA issued unsigned annual contracts titled “Independent Contract of Randi MacDonald.” These contracts referred to her salary, mileage reimbursement, and termination provisions but did not explicitly label her an “independent contractor” within their terms. Ms. MacDonald worked exclusively for SMBA and from her home.

In 2021, citing restructuring due to the COVID-19 pandemic, SMBA informed her on March 9 that her employment would end May 31. SMBA then offered her three options: a short-term three-month position, a restructured position with added duties including bookkeeping (for which she had no training), or six weeks' severance. She accepted the short-term position without waiving her rights. No final signed contract existed for her most recent role.

Summary judgment decision in the Court of King’s Bench

Ms. MacDonald sued for wrongful dismissal. The Chambers judge found that she was an employee, not an independent contractor. This was based on factors such as the duration and exclusivity of the relationship, her integration into SMBA’s operations, and the evolving but controlled nature of her responsibilities. The unsigned contracts were deemed unenforceable as they attempted to contract out of minimum statutory notice.

The judge awarded her 22 months’ notice, minus 3 months already worked, for a remaining 19 months of pay in lieu. The court rejected SMBA’s argument that she failed to mitigate by not accepting a 9-month offer of continued work, as it involved significantly different duties and required a release of all claims. The judge also found no animus or bad faith in how SMBA ended the relationship, declining to award damages for breach of the duty of good faith and fair dealing.

Appeal to the Saskatchewan Court of Appeal

SMBA appealed both the merits and the separate costs decision. It argued the matter should not have been determined summarily, that MacDonald was not an employee, that the 22-month notice was excessive, and that the costs decision was flawed.

The Court of Appeal dismissed the appeals in full. It held that:

• Summary judgment was appropriate, as most facts were undisputed.

• The Chambers judge correctly applied the test for distinguishing employees from independent contractors, and found no palpable and overriding error in determining that MacDonald was an employee.

• The 22-month notice period was on the higher end but still within a reasonable range.

• The judge correctly found no failure to mitigate, since SMBA’s offer included materially different duties and required MacDonald to waive claims.

• The costs award of $11,000 was appropriate, especially in light of MacDonald’s earlier settlement offer of $65,000, which was less than the amount ultimately awarded.

Final result

The Saskatchewan Court of Appeal upheld all findings of the Chambers judge, including MacDonald’s employment status, the wrongful dismissal judgment, the amount of reasonable notice, the rejection of the mitigation defence, and the costs award. SMBA’s appeal was dismissed in full.