Another Case Helps Employees Get More Post-termination Pay
Very recently, the Ontario Court of Appeal released another decision about employment contract termination clauses that significantly helps employees. If you are interested in previous cases see here and here.
What are Termination Clauses?
These sections of employment contracts try to limit employee rights at the time of termination. When an employee is fired and does not have one of these clauses, s/he might be entitled to a month of pay per year worked or even more. With a termination clause, it can be much less. Because of this, there are many legal disputes over whether termination clauses are valid.
The Waksdale case
In Waksdale v. Swegon North America Inc., Mr. Waksdale was terminated without cause after about eight (8) months of employment. Both parties agreed that the “with cause” termination clause was not enforceable.
The employer asked the court to enforce the without cause termination clause, which provided Mr. Waksdale with two (2) weeks termination pay.
Mr. Waksdale claimed that because the “with cause” termination clause was not legally enforceable, the entire termination clause was not enforceable such that he was entitled to common law “reasonable” notice of termination.
The Decisions
The motion judge held that the with cause and without cause sections of the contract were independant and just because one was not enforceable it did not affect the other.
The Court of Appeal disagreed. The Appeal judges held that “An employment agreement must be interpreted as a whole and not on a piecemeal basis. The correct analytical approach is to determine whether the termination provisions in an employment agreement read as a whole violate the ESA. … [The courts] will not enforce termination provisions that are in whole or in part illegal.
Lessons to be learned:
- When an employee is fired, s/he may be entitled to much more than what the employer offers. This is particularly true if the employer bases their offer on the employment contract and termination clauses.
- When an employee receives a new offer of employment and is asked to sign a contract, s/he should understand that this document will attempt to take away the employee’s rights.
In both situations, an experienced employment lawyer may be able to provide advice that could significantly increase the money the employee receives post termination. Seeking legal advice is a sound investment both prior to accepting a job and when that job comes to an end.
If you have any questions about employment contracts or termination, you can contact Nicole Simes and MacLeod Law Firm at 647-204-8107 or at [email protected].
The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.
Tags:
Recent Posts
Laid Off and No Recall in Sight?
The Employment Standards Act the (“ESA”) contains a provision which allows for temporary lay-off. Pre Covid-19, the ESA told employers that they could lay off an employee for 13 out of 20 weeks, or 35 out of 52 weeks if the employer continues the employee’s benefits, for example.
Another Way to Get More Severance From Your Employer
As we have written before, termination clauses may have a significant effect on how much money you receive if you are terminated. If you are fired because of a business decision and not misconduct, it is the without cause termination clause that determines how much...
Paid Sick Leave? Sort of
With the numbers of COVID-19 cases rising again, especially in the GTA, many employees are asking me as a Toronto employment lawyer what happens if they become sick and they are forced to stay home for 14 days. Following the end of the Canada Emergency Response...