As employers have discovered in recent years, although
termination clauses are a best practice, former employees will do
whatever they can to set them aside following termination. In
many cases, courts have set termination clauses aside, despite the
apparent intent of the parties, where they are not drafted
perfectly. A recent case, Wood v. Fred Deeley Imports
Ltd., 2016 ONSC 1412 suggests that the very high standard
imposed on employers may have lessened somewhat.
The termination clause at issue provided that the employer was
entitled to terminate the employee's employment "at any
time without cause by providing ... two weeks Notice of Termination
or pay in lieu thereof for each completed or partial year of
employment with the company". The termination clause
also provided that "payments and notice provided for in this
paragraph are inclusive of your entitlements to notice, pay in lieu
of notice and severance pay pursuant to the Employment
Standards Act, 2000".
The former employee challenged this clause asserting that it was
unenforceable because she accepted a verbal offer of employment
before receiving the written offer of employment and because it did
not specifically provide for the ongoing payment of benefit
premiums as required by the Employment Standards Act,
2000. The Court, however, rejected these arguments on
the basis that the offer of employment preceded her actual start
and because the termination clause provided more than what was
required by the Employment Standards Act, 2000 and the
employer kept the benefits in place.
In sum, in a welcome decision for employers, the Court applied a
sensible analysis that reflected the intention of the parties in
signing the agreement.
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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.
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