After getting only the 8 weeks notice and 12 weeks severance due under the ESA, an employee terminated without cause sued to recover his bonus. The employer said the claim was invalid citing the following language from his contract:
|“Company may terminate the Managing Director by providing the Managing Director the greater of the Managing Director’s entitlement pursuant to the Ontario Employment Standards Act or, at the Company’s sole discretion, either of the following: (a) Two months working notice, in which case the Managing Director will continue to perform all of his duties and his compensation and benefits will remain unchanged during the working notice period. (b) Payment in lieu of notice in the amount equivalent of two (2) months Base Salary” (emphasis added).|
But the court said the clause was unenforceable because it provided for either termination notice or severance and under the ESA he was entitled to both. The employer appealed, contending that the judge looked only at the second part of the clause and ignored the “greater of” language in the first part guaranteeing that the employee would get at least his ESA entitlements. The Ontario Court of Appeal, however, upheld the lower court. It was open for the judge to read the clause as separate clauses—the first part including the “greater of” language and the second part including the (a) and (b) alternatives. And since the latter provided for less than the ESA minimum, the entire clause was invalid [Andros v. Colliers Macaulay Nicolls Inc., 2019 ONCA 679 (CanLII), August 30, 2019].