As the court stated, if a term makes the contract unlawful, then no lawful contractual term can be extracted such as to preserve or save the length of the notice period where the entitlement to
benefits during the notice period is contrary to the statute.
Where a termination clause calls for pay in lieu of notice, but does not provide for the payment of
benefits during the notice period, the entire clause is void as contrary to the Employment Standards Act, 2000.
The ESA entitles employees to
their benefits during the notice period.
In Stevens, the Court essentially held that the failure to expressly identify
benefits during the notice period was fatal to the termination clause.
The employer may find itself legally responsible for paying the employee short - term or long - term disability benefits or the employee's estate life insurance benefits if the employer discontinues
these benefits during the notice period.
Where the termination provisions of existing employment contracts do not explicitly provide an entitlement to
benefits during the notice period, employers should seek legal advice on how to best address such circumstances.
The appellant had brought a motion for summary judgment to determine issues of reasonable notice, loss of bonus for the 2016 year he had worked, loss of bonus during notice period and loss of
benefits during notice period.
Not exact matches
4.2 If Qantas Loyalty terminates or suspends Qantas Frequent Flyer, Members will be able to redeem Qantas Points
during the
notice period in accordance with these Terms and Conditions, except where Qantas is ceasing to operate an airline business and / or has gone into liquidation or other form of administration, in which case Qantas Loyalty may terminate or cancel any Rewards or
Benefits immediately without
notice.
IBM filed an appeal, claiming that the judge should have deducted the amount of pension
benefits paid
during the
notice period from the damages award, which the Court of Appeal dismissed.
The language of the contractual termination clause violated the statute because it set out an exhaustive summary of what the plaintiff was to receive upon termination — «drawing the circle» around the employee's termination entitlements — but failing to provide for
benefits continuation
during the statutory
notice period.
Employers operating in Ontario who «draw the circle» around employee rights and entitlements on termination should carefully review and ensure that their contractual termination clause complies with all aspects of statutory minimum standards, and in particular: (a)
notice or pay in lieu, (b)
benefits continuation
during the
notice period, (c) severance pay, if applicable, and (d) continued vacation accrual
during the termination
notice period.
IBM's second argument in the appeal was to rely on the decision in Sylvester v. British Columbia, in which it was held that wrongful dismissal damages should be reduced by the amount of disability
benefits paid
during the
notice period.
The trial judge awarded damages for wrongful dismissal of 15 months» pay in lieu of
notice, net of Workplace Safety and Insurance Board [«WSIB»]
benefits the appellant received
during that
period, and $ 10,000 in damages for breach of the Code.
First, it excludes Deeley's statutory obligation to contribute to Wood's
benefit plans
during the
notice period.
Damages for dismissal without reasonable
notice are designed to compensate employees for the losses incurred
during the
period of reasonable
notice — the amount of wages and
benefits that they would have earned had they been permitted to serve out the
notice period.»
In the contract at hand, the pension contribution and car allowance
benefits were not included in the amounts to be paid
during the
period of
notice.
While the Court concluded that signing a written employment agreement the day after the employee commenced work did not render the agreement unenforceable, it found that the termination clause contained in the employment agreement improperly excluded the employee's minimum statutory entitlement to
benefits continuation
during the
notice period.
The plaintiff rejected the
notice offered on termination and brought an action for wrongful dismissal, seeking a greater
notice period as well as the payment of
benefits during that
period.
It excludes Deeley's statutory obligation to contribute to the Appellant's
benefit plans
during the
notice period;
For the Court of Appeal, the termination clause's wording excluded and contracted out of the obligation to continue making
benefits contributions
during the
notice period.
She argued that the termination clause excludes FDI's statutory obligation to make
benefits contributions
during the
notice period and it does not satisfy FDI's statutory obligation to pay severance pay.
In doing so, Ontario's top court made it clear that an employer is obliged, not only to continue the salary paid to a dismissed employee
during an appropriate
notice period, but also to continue all employee
benefits, including short and long - term disability
benefits.
Wood argued that the clause excluded Deeley's statutory obligation to contribute to her
benefit plans
during the
notice period and did not clearly require Deeley to pay severance pay upon termination.
First, the Court found the termination clause excluded Deeley's obligation to contribute to Wood's
benefit plan
during the ESA
notice period.
And so, Mr. Olguin was essentially left without any medical coverages or
benefits during the applicable
notice period.
The plaintiff had agreed to
benefit from
periods of increased pay and accepted the risk of
periods of without pay, and could not expect to avoid his part of the bargain by receiving only the higher pay
during the
notice period.
The greatest risk an employer assumes when it discontinues an employee's
benefits is that the employee will become permanently disabled
during his or her
notice period and without having reached a binding settlement with his or her employer.
In Nemeth v Hatch, an employer terminated an employee's employment after just over 19 years and provided him with eight weeks»
notice of termination, 19.42 weeks» salary as severance pay, and continued
benefits (including pension)
during the eight - week
notice period.
IBM took the position at trial that Waterman's pension
benefits should be deducted from the salary and
benefits otherwise payable
during the reasonable
notice period.
The ESA obligates an employer to continue
benefits during the statutory
notice period and any attempt to «contract out» of the ESA is null and void.
The Supreme Court of Canada reiterated in Honda Canada Inc. v. Keays, 4 at para. 32 that damages are confined to the loss suffered as a result of the employer's failure to give proper
notice of dismissal, measured by the loss of wages and salary, and other
benefits, that would have been earned
during the reasonable
notice period.
Zoomermedia argued that that the termination provision was unenforceable because it contravened section 61 (1) of the ESA by expressly excluding entitlement to short - term and long - term disability
benefits during the statutory
notice period.
However, employers should nevertheless continue to exercise caution when drafting termination clauses by specifically referring to
benefits continuation
during the statutory
notice period.
Damages payable upon termination of employment may include
benefits during the reasonable
notice period, including any bonuses and other incentives that would otherwise have fallen due
during that
period.
Many employers are unaware that because a dismissed employee is entitled to be made whole
during the reasonable
notice period the employer risks becoming the dismissed employee's de facto insurance provider if the employer unilaterally cancels the dismissed employee's insurance
benefits without the employee's consent
during the employee's reasonable
notice period.
Although Deeley had provided Wood with the
benefits she was entitled to
during the
notice period as well as a lump sum payment to arguably account for the lack of severance pay, this did not change the fact that the termination clause was deficient and unenforceable.
The Motion Judge awarded Mr. Paquette 17 months» salary and
benefits, but refused to award an amount for loss of bonus payments
during the reasonable
notice period.
In other words, in determining damages for wrongful dismissal, the court will typically include all of the compensation and
benefits that the employee would have earned
during the
notice period
The termination clause was found to be unlawful and therefore void because the words «any amounts paid» could be read as failing to provide for the continuation of the plaintiff's
benefits during the plaintiff's statutory (ESA)
notice period.
If the termination clause contravened the ESA because it excluded Deeley's statutory obligation to make
benefit contributions
during the
notice period, and did not satisfy Deeley's statutory obligation to pay severance pay; and
The employee will be entitled to a bonus, stock option or restrictive stock unit
benefit («variable compensation»)
during the employee's reasonable
notice period absent contractual terms to the contrary.
Employees and employers are entitled to negotiate employment contracts that do not provide for the continuation of
benefits or compensation (typically stock options, bonuses and pension contributions)
during the reasonable
notice period if the employee is dismissed without cause.
A dismissed employee is entitled to be made whole
during his or her reasonable
notice period.1 In other words, the employee's severance or termination package should include all the employee's compensation and
benefits (including any commission, bonuses, stock options, pension contributions and insurance
benefits) that the employee would have received had the employee remained actively employed
during the
notice period.
That is, the appellant took issue with the trial judge's finding that under the Employment Agreement the appellant was not entitled to compensation for the loss of the LTIP
benefits he would have earned
during a
period of reasonable
notice because the appellant was only entitled to severance pay, not the salary and other
benefits which would have flowed to him
during a
period of reasonable
notice.
The trial judge set the appropriate
period of
notice at 20 month and declined to deduct the pension
benefits paid to Waterman
during the
notice period in calculating his damages.
Deducting the
benefits would provide the wrongfully terminated employee with exactly what he would have received had the employment contract been performed: an amount equal to his salary
during the reasonable
notice period and thereafter defined
benefits for the rest of his life.
The actual ratio of the decision is that employees off sick
during what should have been the
notice period can only be compensated in an unfair dismissal action for whatever sickness absence
benefits they would have actually received.
The appellant appeals the dismissal of his claim for his bonus and
benefits during the 17 - month
period of reasonable
notice.
Upon
notice to Us of entering the armed forces, We will return to You pro-rata any premium paid, less any
benefits paid, for any
period during which You are in such service;