We recommend that every new hire sign an employment contract with a termination clause.
If the termination clause provides the employee with more than the minimum notice of termination provided under the Employment Standards Act, then can a terminated employee collect termination pay from your organization and salary from another employee at the same time?
Last week, the Ontario Court of Appeal decided that the answer to this question was yes, unless the termination clause explicitly permits the terminating employer to deduct the salary from the new employer.
The Facts: In this case, Mr. Bowes was entitled to six months notice of termination or pay in lieu of this notice under the terms of his written employment contract. He was terminated without any notice. He found another job during the six months following his termination earning the same income and his former employer stopped paying him termination pay.
The Decision: The Court of Appeal concluded that Mr. Bowes could collect termination from his former employer and income from his new employer until six months after his termination.
Lesson to be learned: An employer should make sure that the termination clause in its employment contract explicitly addresses this issue of what happens to any income that a terminated employee earns during the agreed upon notice period.
The provincial government and judges are forever changing the employment law landscape. It is important to review your employment contracts, policies and practices to make sure they comply with all employment laws and are up to date.
We offer one-hour employment law check-ups where we will review your organization’s legal obligations and any employment law policies that are of particular interest to you. To give you some idea of the areas you can review, check out our Workplace Audit: 20 Areas to Consider.
If you want to amend your employment contract to enhance your management rights or have us conduct an employment law checkup at your workplace, please email us at [email protected] or call us at 1-888-640-1728.
In February 2017, after a 40 day trial, an Ontario trial judge ordered the RCMP to pay Peter Merrifield $100,000 in general damages, $41,000 in special damages, and $825,000 in legal costs. In doing so, the trial judge recognized the tort of harassment. For my blog on...read more
Wrongful Dismissal Update: How to Reduce Termination Pay for Employees Who Earn Variable Compensation
Some employees receive a large percentage of their total compensation in variable compensation. A much litigated issue is whether the employer is required to pay variable compensation to a terminated employee during the applicable notice period and if so how is this...read more
An arbitrator who upholds a grievance can reinstate the employee, or order the employer to pay the employee damages. In a 2018 arbitration case, Arbitrator Surdykowksi decided how to calculate damages for an employee who was not reinstated. Facts Dr. Bernard was a...read more