Executive Summary: Key Legal and Evidentiary Issues

• Enforceability of the termination clause hinged on whether it clearly and unambiguously ousted Singh’s entitlement to common law reasonable notice.

• Singh’s assertion that the changed substratum doctrine nullified the contract due to his evolving role was rejected by the court.

• The handwritten termination clause, inserted by Singh himself, was deemed binding and definitive in limiting notice to 90 days.

• The court found Clark did not repudiate the contract by alleging just cause, as it acted in good faith and had reasonable grounds to do so.

• Clark’s failure to pay 90 days’ notice unconditionally was not considered a repudiation, given ongoing settlement discussions and belief in just cause.

• Singh was awarded $86,699.70 for 90 days’ pay in lieu of notice, as per the contract, with no entitlement to bonuses or additional damages.

Background and employment history

Jamey Dean Singh worked in Alberta’s construction industry for over 40 years. In 2012, he was VP Operations at Ledcor when he began discussions with Paul Verhesen, then CEO of Clark Builders. Singh sought a corporate role with advancement prospects and rejected several initial offers. He ultimately accepted a position with Clark on September 6, 2013, following negotiations that included his own handwritten amendments. He started work on October 15, 2013, as VP Corporate Operations, with the clear understanding he would become COO upon Bill Giebelhaus’ retirement. This promotion occurred on November 1, 2015.

Singh’s employment agreement included a termination clause he personally revised, which stated Clark could terminate his employment either for just cause or with 90 days’ notice or pay in lieu. He also participated in Clark’s Employee Share Ownership Program (ESOP) and received a salary, vehicle allowance, and benefits.

Termination and legal proceedings

In early 2019, Clark discovered serious discrepancies between forecasted and actual project profits. Singh, as COO, was involved in the MOR and WIP report processes. On June 17, 2019, Singh met with Ross (President) and acknowledged the reporting inconsistencies but indicated he did not know how to address them. On August 26, 2019, Singh was handed a Termination Offer, which stated the offer was made to avoid a possible for-cause dismissal. His last working day was agreed to be September 30, 2019. Singh filed a wrongful dismissal lawsuit on December 20, 2019.

Policy terms and clauses in dispute

The clause at issue allowed for termination by Clark with “notice of termination, or pay in lieu of such notice in accordance with notice provisions as described in the Offer of Employment letter dated 09/05/2013,” which stated “a 90-day notice period for the employer.” Singh argued this was either ambiguous or overtaken by his evolving role. The court examined whether the clause unambiguously replaced common law rights and whether subsequent job changes nullified it under the changed substratum doctrine.

Court’s analysis and findings

The court found the termination clause was unambiguous and enforceable. Singh, a sophisticated executive, had drafted and negotiated the final version of the clause, including removing references to the Employment Standards Code. The clause expressly referenced the 90-day provision, which the court interpreted as fixed and not a minimum. The Employment Contract also contained language allowing for changes in duties and responsibilities without affecting the validity of the agreement.

The court also rejected Singh’s argument that the substratum had changed. Singh’s promotion to COO and his evolving responsibilities were anticipated and negotiated from the outset. Clause 2(c) of the Employment Contract explicitly allowed for changes in duties without altering the contract.

The court concluded Clark had a reasonable and good faith basis for alleging just cause due to Singh’s oversight of financial reporting, though it later dropped the allegation during litigation. Clark’s failure to pay 90 days’ notice unconditionally did not amount to repudiation; it was a good faith decision amid unresolved legal claims.

Outcome

Justice Kelsey L. Becker Brookes held that the termination clause was valid and binding. Singh was entitled to 90 days’ pay in lieu of notice, calculated at $86,699.70, inclusive of salary, vehicle allowance, and benefits. No bonuses were awarded as no executives received bonuses in 2019 due to the profit write-down. Singh’s ESOP claims were not compensable under employment damages. Although the court provided an alternative calculation under common law notice (12 months, mitigated to 4 months = $117,165), this was not applied as the contract governed the outcome.