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You Make the Call: Is Contractual Limit on Termination Notice Enforceable?

The High Cost of Termination Notice
Unlike south of the border where employment is at will, you can’t terminate employees in Canada without cause unless you pay them termination notice based on their years of service. How much termination notice you have to pay depends on which law applies:

Employment standards laws (ESA) require notice ranging from 1 to 8 weeks;
Common law notice can run as high as 24 months or even more in extraordinary circumstances.

Contractual Termination Notice Limits
If you’re an employer, you’d obviously rather provide ESA than common law notice. That’s why many employers include language in their employment contract in which employees purport to give up their right to common law notice and accept only the minimum notice required by the ESA in the event they’re terminated without cause.

While that solution obviously makes economic sense, it’s not as simple as it sounds. The problem is that notice limitations clauses are notoriously hard to enforce. The c...

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