We always recommend that our clients use employment agreements
with termination clauses to define and limit their severance
obligations. Often clients ask: do they really stand up in court?
The recent B.C. Court of Appeal decision in Miller v. Convergys CMG
Canada Limited confirms that they do — even when the
agreement contains a provision which offends employment standards
Gerry Miller was dismissed from his employment after seven
years. He started out as a telephone agent and quickly worked his
way up. He signed three contracts with his employer over the years,
the most recent of which when he was promoted to Client Services
Manager in 2006.
The last employment agreement Mr. Miller signed when accepting
the Client Services Manager position provided that his employment
was terminable on "for cause, or by providing you with notice,
or pay in lieu of notice in accordance with the Employment
Standards Act of British Columbia". The agreement also
provided for a probationary period in the new position during which
Mr. Miller could be terminated without notice or pay in lieu.
Mr. Miller argued against the enforceability of the termination
provisions on three main grounds: (i) that the probationary clause
was non-complaint with the Employment Standards Act, and therefore
the entire agreement (or at least the termination provisions) was
unenforceable. On this point, it was conceded that Mr Miller could
not be terminated without notice or pay in lieu required under the
ESA during the probation period if he did not prove suitable. Thus
that part of the termination clause was invalid; (ii) that his job
duties changed so drastically when he was promoted further to
Senior Manager that the former contract no longer applied, and
(iii) the termination clause was ambiguous and therefore
unenforceable. Specifically, the comma created ambiguity (yes
lawyers make these arguments).
The trial judge disagreed with all arguments, and found that the
invalid probationary clause could be severed from the agreement and
that his promotion was a natural progression within the same role
and the employment agreement was applicable. On this point, the
judge noted that the agreement specifically provided that its terms
would still apply even after a promotion.
Regarding the alleged ambiguity of the termination clause, the
trial judge found that despite the fact that it could have been
more clearly worded (or punctuated), its meaning was clear: Mr.
Miller's employment could be terminated without cause on
providing Employment Standards Act minimum notice or pay in lieu.
The employer had provided Mr. Miller with his ESA minimum pay in
lieu in accordance with the agreement and therefore Mr.
Miller's claim was dismissed.
Mr. Miller appealed the decision to the Court of Appeal and the
Supreme Court of Canada. The Court of Appeal agreed with the trial
judge and dismissed his appeal. The Court of Appeal pointed out the
contract had a "severability" clause, a standard type
clause which says if any part of contract is invalid, the rest
remains in force. The Court of Appeal relied on that to uphold the
trial judge's refusal to throw out the balance of the
termination clause because of the illegal probation provision. We
believe a similar result might have applied even without such a
The Supreme Court of Canada has refused to hear Mr. Miller's
This case confirms that employers can rely on employment
agreements to limit severance, even to employment standards'
minimum levels. This case also shows that sometimes
"boilerplate" clauses such as a severability clause,
which may not be given much thought, can prove useful. That being
said, the case underlines the need for employers to have their
termination and probation clauses reviewed by experienced
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