Court Finds Employer Broke Contract, Awards $456,908 to Dismissed Executive

Court Finds Employer Broke Contract, Awards $456,908 to Dismissed Executive By Tahir Khorasanee, LL.M. Senior Associate, Steinbergs LLP In a case that underlines the importance of sticking to written agreements, the Ontario Superior Court of Justice has ordered Artisan Development Labs Inc. and its subsidiary, Artisan Cell Labs Inc., to pay $456,908 to former Executive Vice-President Dr. Nicholas Timmins. The court concluded that Artisan “by their correspondence and actions” repudiated—meaning fundamentally broke—the employment contract when they dismissed Dr. Timmins and failed to honour the severance terms it had promised. A Contractual Promise Unfulfilled Dr. Timmins began working for Arte­san’s American parent company in November 2019, earning an annual salary of $475,782 CAD, plus stock options, benefits and a performance bonus. In 2021 he moved to Toronto to establish Artisan Cell Labs Inc., the company’s Canadian operation, and was promoted to Executive Vice-President. His 2019 employment agreement clearly stated that if he was dismissed without cause, he was entitled to the greater of: Three months’ pay in lieu of notice, or His minimum statutory entitlement under Ontario’s Employment Standards Act, 2000 (ESA). Despite this clear promise, in March 2023 Dr. Timmins received only one week of ESA-minimum notice pay. The letter explaining his termination also tied any additional severance to Dr. Timmins signing a “full and final release,” which would bar him from pursuing any further claim against the company. What “Repudiation” Means When one side to a written contract shows—by words or by conduct—that it no longer intends to be bound by the contract’s terms, courts call that a “repudiation.” In such cases, the innocent party can treat the contract as ended and seek damages under common-law rules. Here, Justice Callaghan agreed with Dr. Timmins that Artisan’s insistence on a release before paying contractual severance made no sense if the company truly intended to honour its three-month notice promise. How the Court Calculated Damages Rather than simply order the three months’ payment, the court moved to assess a fair amount of notice under common law, applying the familiar Bardal factors: Age (44 years) Length of service (3.5 years) Character of employment (senior executive role) Availability of similar work (niche gene-therapy sector) Balancing these considerations, Justice Callaghan set a nine-month notice period. Nine months’ worth of salary, benefits, pension contributions, phone allowance and a prorated bonus totals $456,908. A Warning Shot to Employers For businesses of all sizes, the decision is a vivid reminder: honour your written termination clauses. If you condition contractual severance on signing a broad release—or impose any hidden requirement—courts may find you have repudiated the contract, leaving you exposed to larger common-law awards. Practical Takeaways Draft Clear, Stand-Alone Clauses: Ensure severance or notice provisions are written plainly and without strings attached. Separate Release Agreements: If you require a release or confidentiality covenant, present it in a distinct document—not as a condition to pay what’s already owed. Train HR Teams: Make sure those who handle terminations understand that contractual entitlements must be honoured in full. Budget Accordingly: Factoring in the risk of repudiation claims can save six-figure surprises down the road. Broader Impact Although this dispute involved a high-earning executive in the biotech field, the ruling has implications for workers at every level. Any employee whose contract specifies a fixed amount of severance or notice, now has clear authority to demand common law severance, which is often much higher than the contractual amount. Case Reference: Timmins v. Artisan Cells, 2025 CanLII 2387 (Ont. S.C.J.) Disclaimer: This article is provided for general informational purposes and does not constitute legal advice.