Termination of Employment

Subscribe to Termination of Employment via RSS

The Ontario Court of Appeal has reiterated that, barring exceptional circumstances, reasonable notice for dismissal without cause will not exceed 24 months. The Court partially overturned the lower court’s decision in Dawe v The Equitable Life Insurance Company of Canada, which also ruled on the enforceability of unilateral changes to the employer’s bonus plan.
Continue Reading 24 Months Reaffirmed as the “High End” of Reasonable Notice; Bonus Plan Changes Must Be Accepted by Employee

In 2016, the Ontario Court of Appeal confirmed that dependent contractors are entitled to reasonable notice of termination. In a recent decision, Cormier v 1772887 Ontario Limited cob as St. Joseph Communications, (“Cormier“) the Ontario Superior Court of Justice extended this principle – commenting that service as an independent contractor should be considered in calculating the reasonable notice period in certain circumstances.
Continue Reading Independent Contractors Entitled to Reasonable Notice on Dismissal?

The Supreme Court of Canada will decide if an employee is entitled to payments owed in the event of a corporate acquisition despite the fact that the employee resigned over a year before the triggering event. On January 31, 2019, the SCC granted leave to appeal in Matthews v. Ocean Nutrition Canada Limited. The employee asserts that he is entitled to over $1 million in profits following the acquisition of his former employer – even though he had resigned 13 months before the transaction. If the SCC decides in the employee’s favour, employers may face more challenges (and increased litigation) when seeking to enforce limiting clauses in employment agreements.
Continue Reading Supreme Court to Decide if Bad Faith Employer Conduct Nullifies Limit on Incentive Compensation

This is part two in our series on recent Ontario Superior Court decisions that employers should be aware of before finalizing future employment agreements. See here for our first part, on the recent trend of lengthy notice period awards for long service employees of advanced age.

As most employers know, unenforceable termination clauses often give rise to costly wrongful dismissal claims. Yet the case law in this area is constantly evolving, and it is increasingly challenging to stay abreast of what a court will consider to be enforceable.
Continue Reading Defining “Cause” in a Termination Provision: Mind Your Language!

This is the first of our two-part series on recent Ontario Superior Court of Justice decisions that employers need to be aware of before finalizing their next employment agreement. The decisions highlight the risk of failing to include an enforceable termination provision in the employment agreement. Absent such a provision, an employee dismissed without cause will be entitled to “reasonable notice” of termination at common law.

In this first part, we examine two recent decisions of the Court that suggest that the Court now favours longer notice periods for long service employees of advanced age: Dawe v Equitable Life Insurance Company, 2018 ONSC 3130 (Dawe) and Saikaly v Akman Construction Ltd., 2019 ONSC 799 (Saikaly). Until recently, 24 months was generally considered as the upper limit of notice entitlement that courts would award absent exceptional circumstances.
Continue Reading Dismissing a Long Service Employee of Advanced Age May Prove to be More Costly

Although brevity is almost always better than wordiness, it would have been better if the legislature had used a few more words in the severance pay provisions of Ontario’s Employment Standards Act, 2000. Under the ESA, employers with a payroll of at least $2.5 million are required to provide statutory severance pay when dismissing an employee with 5 or more years of service. Unfortunately the provision is silent as to whether payroll within Ontario or, rather, global payroll is determinative. It would have been helpful if the drafters had indicated where, exactly, to draw the line.

The pendulum has swung back and forth on this issue. Most recently, the Ontario Labour Relations Board (“OLRB”) held that Ontario-only payroll is determinative, diverging from the direction previously taken by the Ontario Superior Court of Justice. We outline the key cases to date below.
Continue Reading Statutory Severance Pay: Ontario Labour Relations Board Decides $2.5M Threshold Does NOT Include Payroll Outside Ontario

The Ontario Superior Court recently pronounced that alleged acts of workplace sexual harassment, including alleged incidents occurring in the workplace, are not connected to employment but are separate matters: Watson v. The Governing Council of the Salvation Army of Canada. Further, the Court held that the employer’s release did not bar claims based on these allegations.
Continue Reading Does Your Full and Final Release Cover #MeToo?

Last week, the Ontario Court of Appeal released yet another decision on the interpretation and enforceability of termination clauses: Amberber v. IBM Canada Ltd., 2018 ONCA 571. Recent appellate decisions on this issue have been inconsistent and/or provided less than clear guidelines, see here, here, here and here. In contrast, Amberber is a bright spot for employers. The Court not only reaffirmed the principle that termination clauses must be interpreted as a whole, but also held that courts should not strain to create an ambiguity where none exists.
Continue Reading ONCA Upholds Termination Clause and Signals to Courts to Not Create Ambiguity Where None Exists

Employers who include discretionary bonuses as part of their employees’ compensation packages should be aware of the Ontario Court of Appeal’s latest guidance on (i) bonus entitlement for the period up to dismissal and (ii) compensation for the loss of a bonus during the reasonable notice period. This guidance came in the Court’s decision, issued last week, in Singer v. Nordstrong Equipment Limited, 2018 ONCA 364. Our analysis of the lower court’s decision in this case can be found here. 
Continue Reading Is Your Dismissed Employee Entitled to a Bonus?

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