The qualification of the contractual relationship between the syndicate of co-owners and the condo manager is of high importance since the rules of termination differ depending if it's a contract for services or a contract of employment; section 2085 of the Civil Code of Québec defines the contract of employment as a contract, verbal or written, by which a person, the employee, undertakes for a limited time and for remuneration, to do work under the direction or the control of another person, the employer.
Differences between a contract for services and a contract of employment
The manager bound to the syndicate by a contract of employment does not have the same relationship as the one bound by a contract for services; throughout the duration of his services, the salaried manager is subject to the management and the control exercised by the syndicate over him (bond of subordination) which is not the case of the service provider manager because in principle, the latter has the free choice of the means of execution of the contract.
The bond of subordination is one of the conditions of existence of a contract of employment; it characterizes the legal relationship between the employee manager and the syndicate, that is to say the latter may notably give instructions to his employee, define his duties and work schedule, supervise the execution of the mandate for which he is responsible as well as sanction his faults, his shortcomings or his failures in the duties incumbent upon him. Furthermore, the contract of employment necessarily involves a natural person whereas the service provider in a contract for services may be a natural or legal person.
Verbal or written contract
The contract of employment may be oral or written; it is nevertheless recommended to set down its terms and conditions in writing and so, to be able to prove its provisions.
Fixed term contract
A fixed term contract has a clear identifiable term such as a date; its termination could also be associated with a predictable and certain event. This type of contract logically ends at the scheduled time but it may be tacitly renewed for an indefinite period when the employee is still at work five days after the expiry of the initial contract and the employer has not opposed to its renewal.
A fixed term contract of employment binds the parties until its expiry; theoretically, the employer who terminates it prematurely without a serious reason would give the employee the right to be paid his salary until the expiry of the contract. In return, in the event that the employee leaves his job before the expiry of the contract, the employer would theoretically have the right to claim damages; however, if the departure is justified by a serious reason, either party may unilaterally terminate the contract of employment without prior notice and so, in accordance with section 2094 of the Civil Code of Québec.
Indeterminate term contract
In the case of an indeterminate term contract, as long as a reasonable period of notice is granted, either party may terminate it at any time; reasonableness is assessed notably by the nature of the job, the duration of the period of work as well as the specific circumstances in which it is carried on and so, in accordance with section 2091 of the Civil Code of Québec.
However, the obligation to provide a reasonable prior notice is subject to an exception when a serious reason justifies terminating the contractual relationship; in such a case, the dismissal will not be accompanied by a prior notice period or a severance in lieu of notice and so, in accordance with section 2094 C.c.Q.
Breach of the manager’s obligations
Just like the directors, the manager must act with prudence, diligence, loyalty and honesty towards the syndicate and the board of directors and so, in accordance with section 2088 of the Civil Code of Québec because by not acting this way, this could constitute serious grounds for terminating his contract of employment without prior notice or severance in lieu of notice.
Furthermore, an employed manager credited with two years of uninterrupted service for the same syndicate could complain to the Labour standards, equity, health and safety Commission (Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST) by invoking section 124 of the Act respecting labour standards and argue having been dismissed without a good and sufficient cause.
WHAT YOU SHOULD KNOW! The distinction between a contract of employment and a contract for services is important in the management of co-ownerships (condominiums) as it determines the rules applicable at the end of the contractual relationship.
WHAT TO KEEP IN MIND: The syndicate and the salaried manager must honor their respective rights and obligations undertaken in accordance with their contractual relationship; they must do so in good faith and in a reasonable manner.
WARNING! Except in the case of a specific provision in the contract of employment mentioning that it constitues a serious reason, a syndicate can't dismiss or replace a salaried manager on the ground that being a co-owner he neglects to pay his contribution to the common expenses, the contingency fund or the self-insurance fund; such right of replacement strictly applies to the divided co-ownership manager and so, in accordance to section 1086 of the Civil Code of Québec.
Back to sub-factsheet: Termination of the manager's contract
