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

The Ontario Court of Appeal recently confirmed not only that dependent contractors are entitled to reasonable notice of termination, but that 26 months can be an appropriate notice period for long-service dependent contractors.
Continue Reading Dependent Contractors are Entitled to Reasonable Notice (and Potentially Lots of It)

In a previous post, we discussed the Supreme Court of Canada’s (“SCC“) decision in Potter v. New Brunswick (Legal Aid Services Commission), in which the SCC purported to clarify the test for constructive dismissal as it applied to suspensions. But does the decision apply to all suspensions? What if an employee is suspended because of misconduct? Or pending determination of criminal charges? And do employers have to continue paying employees while suspended for these reasons?

To help provide some guidance, we will be publishing a two-part series dedicated to the issue of suspensions: what types of suspensions exist, when suspensions should be paid, and – perhaps most importantly – what types of suspensions courts may consider to have been constructive dismissals. This post will provide an overview of the law relating to paid suspensions, while our next post in the series will address unpaid suspensions.
Continue Reading Suspensions in the Post-Potter Age: Key Take-Aways for Employers (Part 1)

This two-hour CLE program will provide in-house counsel, HR professionals and business leaders with practical guidance and checklists to tackle the key issues that arise when their company moves into new jurisdictions around the world. We will look at three critical elements of international expansion:

  1. Getting the Structure Right, Early.  What factors do you consider when choosing the type of business entity to use for a particular type of business, long term objective and country?  Understand the impact your choice of business entity can have on your future business and related legal issues.
  2. Realities of Global Employment.  What are the most significant international employment, hiring and termination issues for in-house counsel dealing with international expansion and ongoing operations? Take away strategies to help you avoid the biggest pitfalls and successfully manage a global workforce.
  3. Equity Compensation.  How are companies thinking about equity outside of Canada? Learn whether the use of equity grants to provide future incentives and variable compensation for executives and other employees is available or advisable in other jurisdictions in light of securities law, tax withholding/reporting, exchange controls and other requirements.


Continue Reading Going Global: A Practical Survival Guide for Canadian Multinational Employers (May 28, 2015)

Many in the employer community were surprised by three recent cases (here, here and here) in which the Ontario courts struck down termination clauses in employment contracts for the failure to specifically reference the continuation of benefits through the statutory notice period under the Employment Standards Act, 2000 (the “ESA“).  The termination clauses in the employment contracts at issue in these cases appeared, on their face, to be valid and enforceable in light of the prevailing legal principles and existing case law.
Continue Reading Is Freedom of Contract Dead in Canadian Employment Law? Termination Clauses and Benefits Continuation Through the Notice Period

One of the questions we are commonly asked by non-unionized employers is whether they should use written employment agreements with their employees. While written employment agreements are not a replacement for sound human resources planning or judgment, a well-written agreement, tailored to the specifics of the employment relationship, can be an invaluable component of successfully managing employees throughout the life-cycle of the employment relationship, beginning to end.
Continue Reading Early New Year’s Resolutions: Are You Using Written Employment Agreements With Your Canadian Employees?