Ask the ExpertCategory: QuestionsTermination clause for ESA and CLC based employee contracts/offer letters
hri_Admin Staff asked 1 year ago

Hi there, 
I have a big question for you. I am a one person show in the HR department at my company. I support two family owned Ontario based companies. One falls under CLC jurisdiction and the other ESA (Ontario). 
In light of the Waksdale case, I am in the process of updating our offer letters, but I feel like I’m falling down a rabbit hole lol. Any advice would be much appreciated!
Our current termination clauses for ESA and CLC offer letters are as follows:
CLC letter:
Termination of Employment:
The company may terminate the agreement for any reason other than cause, upon payment of such amounts as may be required by the Canada Labour Code, calculated on the Employee’s salary. In exchange for such payment, the employee shall execute such release and indemnity agreement as may be required by the company. Without limitation to the foregoing, the employee acknowledges that any payment made to them in accordance with this article shall be received in complete and full settlement of any and all actions, complaints, potential or otherwise that the employee may have against the company or any of its successors, directors, officers or employees in respect of their employment or termination of their employment and that such payment shall be inclusive of any and all pay in lieu of notice, severance, overtime, vacation pay, holiday or any other amount whatsoever.
If an employee’s employment is terminated for cause, the employee shall not be entitled to any notice of termination of employment or pay in lieu thereof.
The employee may terminate the agreement upon two (2) weeks written notice of resignation. The company may waive all or part of that notice period.
 
ESA letter: 
Termination of Employment:
The company may terminate the agreement for any reason other than cause, upon payment of such amounts as may be required by the Ontario Employment Standards Act, calculated on the Employee’s salary. In exchange for such payment, the employee shall execute such release and indemnity agreement as may be required by the company. Without limitation to the foregoing, the employee acknowledges that any payment made to them in accordance with this article shall be received in complete and full settlement of any and all actions, complaints, potential or otherwise that the employee may have against the company or any of its successors, directors, officers or employees in respect of their employment or termination of their employment and that such payment shall be inclusive of any and all pay in lieu of notice, severance, overtime, vacation pay, holiday or any other amount whatsoever.
If an employee’s employment is terminated for cause, the employee shall not be entitled to any notice of termination of employment or pay in lieu thereof.
The employee may terminate the agreement upon two (2) weeks written notice of resignation. The company may waive all or part of that notice period.

Stephanie Fry Staff replied 1 year ago

I have tweaked the above termination clauses. Would you be able to let me know if I am on the right track?

ESA based letter:
Termination of Employment:
The company may terminate the employment relationship without cause, upon payment of such amounts as required by the Ontario Employment Standards Act, calculated on the employee’s salary. Termination without cause refers to when an employer terminates an employee without providing a reason for terminating the employee.
Under common law, an employee who is guilty of prolonged incompetence and/or serious misconduct will be terminated for just cause and shall not be entitled to reasonable notice at common law.
Under the Ontario Employment Standards Act, an employee who is guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer will be terminated for cause and shall not be entitled to any notice of termination of employment or pay in lieu thereof or any applicable severance pay.
The employee may terminate the employment relationship upon two (2) weeks written notice of resignation. The company may waive all or part of that notice period.

CLC based letter:
Termination of Employment:
The company may terminate an employee with less than 12 continuous months, but greater than 3 months of service without cause, upon pay in lieu of notice as required by the Canada Labour Code, calculated on the employee’s salary. Termination without cause refers to when an employer terminates an employee without providing a reason for terminating the employee.
The company may terminate an employee for just cause and shall not be entitled to any notice of termination of employment or pay in lieu of notice thereof or applicable severance pay. Termination for just cause refers to when an employee is found guilty of prolonged incompetence and/or serious misconduct.
The employee may terminate the employment relationship upon two (2) weeks written notice of resignation. The company may waive all or part of that notice period.

1 Answers
Rory Lodge Staff answered 10 months ago

OMG!!! You’re a brave person! Drafting an enforceable termination notice limit is about as easy as for a camel to pass through the eye of a needle. Not even the most seasoned attorneys have been able to pull it off. So, I’m not going to even try to critique your drafts or attempt any of my own. What I can do, though, is look at some of the actual cases and find examples of clauses that failed, like the one in Waksdale. I don’t know if that is going to help you very much. I’d be happy to chat with you on the phone–as long as it can wait until Monday. glennd@bongarde.com