Not exact matches
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.
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.
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.
Employers will be prohibited from forcing employees to use
entitlements such as vacation or overtime
during a termination
notice period, unless agreed to by both parties.
In other words, if a dismissed employee is entitled to 10 months reasonable
notice and 18 weeks»
notice and severance pursuant to the ESA, the court will award the dismissed employee damages representing 10 months»
notice and, presuming the ESA
entitlement has been paid, will reduce the award of damages for the money already paid to the employee
during the
notice period.
The Court further concluded that the employment income which Ms. Brake earned
during her statutory
notice entitlement period was not deductible as mitigation income, reasoning that statutory
entitlements (termination and severance pay) are not damages and that employees are entitled to receipt of these statutory
entitlements whether or not they secure new employment
during the
period they are intended to cover.
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, any agreement or policy that limits the employee to only certain
entitlements during the reasonable
notice period must comply with the minimum standards of either the Employment Standards Act («ESA») or Canada Labour Code.
In upholding the trial judge's damages award, the Court of Appeal adopted the reasons from Bolland v APV Canada Inc in finding that regardless of income received from other sources
during the statutory
notice period, an employee is entitled to receive all statutory minimum
entitlements regardless of any mitigatory earnings.
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.
In dismissing the grievance, the Arbitrator held that an
entitlement to statutory termination pay
during the
notice period is premised on the employee performing actual work, unless the contract of employment says otherwise.
Employers would be prohibited from forcing employees to use
entitlements such as vacation or overtime
during a termination
notice period, unless agreed to by both parties.
Allowing the employer to terminate an employee
during the
notice /
entitlement period of maternity / parental leave only for situations where the business is closed or suspended.