A recent decision by the Ontario Court of Appeal is generating
interest as a welcome victory for employers. In Musoni v.
Logitek Technology Ltd.,1 the Court upheld a
termination provision in an employment agreement without
scrutinizing the validity of the provision.
Musoni commenced employment with QLogitek in October 2005 as a
bilingual customer support agent. His written employment agreement
provided that either party was entitled to terminate Musoni's
employment on 15 days' notice. Although this termination
provision complied with the notice requirements in the
Employment Standards Act, 2000 ("ESA") at the
time of termination, with additional service, his statutory notice
entitlement would have eventually exceeded 15 days. Furthermore,
the termination provision did not provide for severance pay or
continuation of benefits during the statutory notice period
pursuant to the ESA.
In March 2008, QLogitek terminated Musoni's employment on a
without cause basis. Relying on the termination provision, QLogitek
provided Musoni with an amount equal to 15 days' pay in lieu of
notice. Musoni subsequently brought an action for wrongful
At trial, the Superior Court dismissed Musoni's action on
the grounds that he had received his full notice entitlement under
both the employment agreement and the ESA. In coming to this
conclusion, the Court noted that:
Although the Plaintiff did not have legal advice when he
signed the Employment Agreement, there is no suggestion that he did
not read it and understand it. Indeed, he had several weeks to do
so prior to signing it. The Plaintiff is a sophisticated person who
is articulate in both English and French.
In a brief endorsement, the Court of Appeal upheld the decision
of the Superior Court, stating that: "The employment contract
between the appellant and the respondent was clear in providing for
15 days' notice in order to terminate. The appellant was given
pay in lieu of notice with (sic) accordance with the
Lessons for Employers
Although the reasoning in this case is helpful to employers, as
it suggests that employees should be held to the contracts that
they sign, we would advise caution before relying too heavily on
In particular, this decision appears to be inconsistent with
some earlier case law that indicates contractual termination
provisions may be void and unenforceable if they: (a) do not
expressly state that benefits continue during the statutory notice
period, and/or (b) could conceivably provide for less notice and
severance pay than the minimums under the ESA, even if the
formula for a particular employee at the time of dismissal results
in a greater benefit2.
Neither the Superior Court nor the Court of Appeal considered
the findings of earlier courts, because Musoni (who was
self-represented) conceded that his contract was valid and in
force, and he did not appear to rely upon any case law to challenge
the validity of the termination provisions. Instead, Musoini's
action was premised on other alleged wrongdoings (e.g., that
QLogitek had terminated his employment on a mistaken belief that he
had been convicted of a criminal offence), which the court
determined to be irrelevant.
It is also unclear whether QLogitek provided benefits to
employees, or met the threshold for statutory severance pay, which
could distinguish this case (in some respects) from earlier case
At the end of the day, this case will be helpful to employers
who seek to rely upon valid and enforceable employment contracts.
However, given the minimal analysis of the termination provisions,
employers should not rely upon this case to save contracts that
fail to meet minimum statutory standards. There is no substitute
for properly drafted termination provisions, and it remains crucial
for employers to ensure that such provisions provide for (at least)
the minimum amount of notice, severance pay (if applicable) and
benefits continuation required under the ESA.
1 2013 ONCA 622.
2 For example, see
Wright v. The Young and Rubicam Group of Companies wherein the
Court stated that "it is neither reasonable nor practical to
leave the individual employee in the position of having to keep an
eye on the relationship between the statutory minimum and the
The foregoing provides only an overview. Readers are
cautioned against making any decisions based on this material
alone. Rather, a qualified lawyer should be consulted.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).