The 2016 decision is noteworthy because it provides a thorough review of previous Canadian decisions that have
considered termination clauses in employment contracts.
First, the decision in Stevens does not sit easily with the case law that has
considered termination clauses.
In 2016 the Ontario Court of Appeal
considered a termination clause in Oudin v. Centre Francophone de Toronto.8 that stated the employer could terminate the appellant's employment with the ESA minimum «notice» but made no mention of «severance».
Not exact matches
The Court then
considered a severability
clause in the contract, upon which the employer relied to have the offending language removed, thus rendering the
termination clause enforceable.
This decision
considered two common challenges to
termination clauses.
In October, the Ontario Court of Appeal once again
considered the enforceability of
termination provisions, deciding that a severability
clause in an employment agreement will not save a
termination provision that provides the employee with less than the minimum ESA entitlements.
As a result of section 5 (1), ESA, the Court of Appeal stated that where the
termination clause contains «even one» violation of the ESA, the entire
termination clause would be
considered void and thus, unenforceable.
Employers who wish to limit their exposure to longer notice periods for skilled, short service employees should ensure that they have well - drafted
termination clauses in place, and
consider a provision allowing for restrictive covenants to be waived when their harm outweighs their benefit.
Unlike the
termination clause considered by the Court of Appeal in its 2017 decision, Wood v Fred Deeley Imports (which you can read about in more detail on our blog), the
clause in this case did not exclude the employer's obligation to provide severance pay; it simply said nothing about the obligation.
However, employers need to carefully
consider whether and how fixed - term contracts may be renewed pursuant to the contract so that
termination clauses always provide the minimum
termination entitlements under the ESA, regardless of when the contract may be terminated during the life of the contract, including during any renewal of the term as permitted by the contract.
if the
termination clause is enforceable and the employer will not agree to its removal
consider refusing the job offer.
If this is not the case, or the ubinhabitability
clause does not trigger, you may also
consider requirements that issues be addressed n a reasonable time, thereafter being grounds for
termination of lease.