The recent decision in Miller v. A.B.M. Canada Inc. provides a useful
lesson on the extent to which one can rely on the termination
provisions in an employment contract.
In this case, Mr. Miller joined ABM in 2009. He was given a
draft employment contract with no deadline for him to sign it. It
was set up with a series of appropriate headings and a plain
language description of the terms appropriate to each heading. It
contained a clause entitled "Termination" and at trial,
Mr. Miller testified that he saw the heading and knew what it meant
but did not read the terms set out under it.
The contract provided for a salary and in addition, ABM agreed
to match Mr. Miller's personal pension contributions up to a
maximum of six percent of base salary. Mr. Miller was also to be
provided with a monthly car allowance. These additional items
appeared under the headings "Remuneration" and
"Fringe Benefits" respectively.
Under "Termination", the contract provided that Mr.
Miller's employment could be terminated without cause
"upon being given the minimum period of notice prescribed by
applicable legislation, or by being paid salary in lieu of such
notice or as may otherwise be required by the applicable
Mr. Miller began work in September 2009. His employment was
terminated in January 2011. At that point, ABM provided Mr. Miller
with two weeks of salary in lieu of notice, being salary in lieu of
the minimum period of notice prescribed by Ontario's
legislation. He ultimately received a pay cheque for the two
weeks' salary plus vacation pay. The cheque did not include
anything for his car allowance component or pension
Mr. Miller sued for damages, taking the position that the
termination provision was null and void so that his entitlement
should be determined on the basis of the common law. ABM's
position was that its obligations were limited to payment of salary
under the contract, which payment was made. ABM acknowledged that
Mr. Miller might be entitled to the pension contribution of six
percent of base salary for two weeks plus a car allowance for two
weeks, but nothing more.
The court observed that employees under a contract of employment
for an indefinite period are entitled to reasonable notice of
termination. This is to be treated as a presumption, rebutted only
if there is a contract clearly specifying another period of notice
and that other period is not inconsistent with legislated
The court felt that a termination provision specifying a minimum
period of notice would be effective to rebut the common law
presumption if the period is not contrary to the minimum provided
by the legislation. However, the court observed that the length of
the notice period is only part of the termination equation. One
aspect is the length of time during which the employee is to be
paid in lieu of notice. The amount to be paid to the employee
during that period is a separate issue.
The law is clear that any provisions that attempt to contract
out of minimum employment standards by providing for lesser
benefits than those legislated as minimums, are null and void.
In this case, the termination clause provided that Mr.
Miller's employment could be terminated upon being paid
salary in lieu of the minimum period of notice
prescribed by the legislation. Mr. Miller, however, was also
entitled to additional amounts for pension contributions and car
allowance as part of his remuneration package.
The court found that the termination clause actually provided
for compensation in an amount that was less than required by the
legislation. The minimum employment standards legislation includes
benefits. Salary, as defined in the contract and specified in the
termination clause, did not.
As a result, the termination clause failed to comply with the
provisions of the legislation. For that reason, it was null and
void and incapable of rebutting the common law presumption that Mr.
Miller would be entitled to reasonable notice under common law
principles. The court went on to award damages equivalent to 2.5
months of base salary together with additional amounts for
It is easy to criticize this decision for being overly
technical. One would have to assume that if the person at ABM who
prepared that contract had been properly advised, the word
"salary" in the termination clause would have been
changed to take into account the entire remuneration package being
provided to Mr. Miller. The additional amounts in issue were quite
trivial. Nevertheless, as technical as this approach may appear,
this is a reflection of the way courts interpret employment
agreements. Generally speaking, employees tend to be given the
benefit of any doubt. This case is yet another illustration of the
care that has to be taken in drafting employment contracts and
particularly their termination provisions.
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.
A former teacher at Bodwell High School has learned a valuable lesson from the B.C. Human Rights Tribunal— it is not discriminatory for an employer to offer child-related benefits to only employees with children.
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.
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