BLG's Charities and Not-for-Profit Group held its 14th
Annual Sector Update for Charities and Not-for-Profit Organizations
on November 13, 2013 in its Toronto office. The following is a
synopsis of a presentation given by me at this update:
Drafting enforceable employment contracts with enforceable
termination clauses is not as straightforward as one might think
– there are a lot of traps to consider! As with
any contract, it is important to ensure there is a clear offer and
acceptance of the contract, consideration (value flowing both ways,
e.g., the employee provides services and in exchange receives
compensation), and the contract must be signed freely and
voluntarily and without any pressure being placed on the employee.
In addition, employment contracts must be signed
before (not on, or after) the first day of work, and
should specifically reference or attach (as an appendix) all key
terms and conditions such as bonus entitlements, termination
clauses, any non-solicit or non-compete obligations, and important
Remember that termination clauses must be very carefully drafted
if the intention is to displace the presumption that employees will
receive "common law reasonable notice" upon
termination. Termination clauses must provide for
at least the minimum entitlements under applicable provincial
employment standards legislation (which, in Ontario, includes
notice of termination or pay in lieu thereof, benefits continuation
during the termination period, and – where the employee has
served more than 5 years and the employer has a payroll of at least
$2.5 million annually – severance pay).
Termination clauses and formulas that actually or potentially
generate less than the employment standards legislation minimums
will not be enforced. Recent case law has made it clear
that termination clauses must specifically reference the
continuation of benefits. Recent case law also confirms that
unless a termination clause specifically provides for a cut-off in
the event of mitigation (i.e., if the employee finds new work), the
entire package will be payable to the employee.
We recommend that you review your precedent employment contracts
and termination clauses on a regular basis to ensure they comply
with developing case law and applicable statutes. We
are happy to help!
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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