Ask the ExpertCategory: QuestionsIs a termination clause enforceable?
hri_Admin Staff asked 1 year ago

We have updated our employment agreements and they have been reviewed by lawyers. In that case, are the termination clauses enforceable or do employees still qualify for ‘common law’ severance pay? The clauses meet all ESA requirements. 

2 Answers
Best Answer
Glenn Demby Staff answered 1 year ago

By “termination clauses,” I trust you mean contract clauses saying that if the employee gets terminated without cause, he/she agrees to waive common law notice rights and accept termination notice required by the ESA? If so, the enforceability of the clause all depends on how it’s drafted. As you may know, there’s a steady stream of litigation challenging the legality of these clauses, especially in Ontario. And employees almost always win.That’s because courts are EXTREMELY PICKY about these clauses and won’t enforce them if they’re in any way unclear or ambiguous or if they can be interpreted in any way as depriving an employee of any of his/her ESA rights, even if that troublesome language isn’t relevant to the employee’s case. There was a major case out of Ontario called Waksdale that you might want to check out. At least, you might want to check out our analysis of it. https://hrinsider.ca/employment-contracts-ontario-case-casts-doubt-on-enforceability-of-termination-notice-limits/
The good news is that your lawyers surely know all about Waksdale and all of the other cases. And if they’ve carefully reviewed the clause and are confident in its validity, I would never, ever second guess them. Glenn

Teodora Satmari replied 1 year ago

Thank you, Glenn. This is very helpful

Glenn Demby Staff answered 1 year ago

Any time, Teodora.