A recent decision of the Alberta Court of Appeal adds further confusion to the issue of the enforceability of termination clauses. In Holm v AGAT Laboratories Ltd, 2018 ABCA 23 (“Holm“), the Alberta Court of Appeal (“Court”) held that explicit language must be included in a termination clause to oust an employee’s common law rights. Continue Reading Alberta and Ontario Courts Diverge on Termination Clauses
The Ontario Court of Appeal just released another decision on the interpretation and enforceability of termination clauses – the latest chapter in a less-than-clear set of guidelines. Generally speaking, a properly drafted termination clause can be used to limit an employee’s entitlements on dismissal. Continue Reading Ontario Court of Appeal Weighs in (Again) on Termination Clauses
To ring in the New Year, we highlight the ten most significant developments in Canadian labour and employment law in 2017: Continue Reading Top 10 Canadian Labour & Employment Law Developments of 2017
Many employers rely on the discretionary nature of their bonus plans to deny bonuses to employees they’ve dismissed. However, in last month’s decision in Singer v Nordstrong Equipment Limited, 2017 ONSC 5906, the Court held that stipulating that a bonus is discretionary in the policy doesn’t necessarily give the employer complete freedom to withhold the bonus. Rather, discretionary bonuses must be awarded through a “fair, identifiable process.” Continue Reading Is a Discretionary Bonus Really Discretionary?
We are pleased to report that the Ontario Court of Appeal has reaffirmed the principle that a purchaser of the assets of a business is free to offer employment on new terms to employees of the vendor and can rely on the resulting written employment agreement as binding (Krishnamoorthy v. Olympus Canada Inc., 2017 ONCA 873). Continue Reading Court of Appeal Rules Termination Clause Valid on Sale of Business
In its recent decision in North v. Metaswitch Networks Corporation, the Ontario Court of Appeal concluded that a severability clause could not be used to “rewrite” or “read down” a termination provision to make it comply with the Employment Standards Act (the “ESA”). Instead, the Court of Appeal held, where any part of a termination clause is void, the entire provision must be struck and the severability clause becomes inoperative. This case is a reminder to employers that there are no shortcuts when it comes to drafting your employment agreements—termination provisions must be carefully drafted to limit termination liability without breaching local employment standards. Continue Reading Severability Clause Cannot Save Illegal Termination Provision, Court of Appeal Rules
The Supreme Court of Canada (“SCC”) recently ruled that a unilateral contract renewal clause was valid, despite its potential to bind one party perpetually: Uniprix inc. v. Gestion Gosselin et Bérubé inc. The clause afforded sole discretion to the respondents to renew or terminate their contract with Uniprix. The wording of the clause, the nature of the contract and the relationship between the parties were determinative in the majority’s ruling, which upheld the decisions of the Court of Appeal and the Superior Court of Quebec. The SCC’s decision and our key takeaways are outlined below. Continue Reading SCC Decision Reminds Employers to Draft Termination Clauses with Care
In the recent decision of Covenoho v. Pendylum Ltd., 2017 ONCA 284, the Ontario Court of Appeal put an end to any debate about the enforceability of termination provisions in employment agreements that may violate minimum employment standards legislation in the future. The takeaway for employers from the case is as simple as it is noteworthy: a termination provision that breaches minimum employment standards legislation in the future – even if compliant at the time of the employee’s termination from employment – is void and therefore will not be enforced. Continue Reading Into the Void: Potential Future Violations of ESA Sufficient to Set Aside Employment Contract
“‘Then you should say what you mean,’ the March Hare went on. ‘I do,’ Alice hastily replied; ‘at least ‒ at least I mean what I say ‒ that’s the same thing, you know.’ ‘Not the same thing a bit!’ said the Mad Hatter.”
– Lewis Carroll, Alice’s Adventures in Wonderland
There is no “madness” in saying what you mean; in the realm of contracts ‒ especially employment contracts ‒ the madness is in not doing so, especially if not “saying what you mean” leaves contractual intention to implication or “understanding”.
A case in point. Earlier this month, the Ontario Court of Appeal accepted the argument of my colleague Jordan Kirkness, against the contention that terms can be “implied” due ‒ in this instance ‒ to “industry custom”: Hampton Securities Limited v. Tassone, 2017 ONCA 69. Continue Reading Of Alice, Patton and Dr. Seuss: Latest on Implied Terms in Contract
Recently Canadian singer Alanis Morissette became the latest well-publicized victim of fraud at the hands of one she employed and trusted: http://www.bbc.co.uk/news/amp/36316327. She joins a long list of celebrities who have suffered fraud at the hands of those employed to trust, amongst them the Beatles, Beyoncé, David Bowie, Billy Joel, Bob Dylan, Leonard Cohen, Elvis, the Rolling Stones. Continue Reading Jagged Little Pill: What “You Oughta Know” Regarding Agency Fraud