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
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 a recent decision, Merritt v. Tigercat Industries, 2016 ONSC 1214, an Ontario court held that the employer did not have sufficient cause for dismissing an employee on the basis of his pending criminal charges and allegations by another employee of potentially related conduct, where the employer had failed to carry out a proper investigation into the matter. This case underscores the need to carry out an appropriate investigation before determining that termination, or any form of disciplinary action, is merited.
The case also brings clarity to the issue of whether an employee can refuse to answer questions in a workplace investigation that pertain to criminal charges brought against him.
Continue Reading The Right to Remain Silent: Employer Mishandles Workplace Investigation (and Pays for It!)
A recent decision of the Human Rights Tribunal of Ontario (the “HRTO”) has further defined the scope of the test for “family status” discrimination. Employees may not be required to take measures to find alternative arrangements for infrequent, sporadic or unexpected family needs, before seeking protection under the Human Rights Code (the “Code”).
Continue Reading Family Status Discrimination: HRTO Narrows “Self-Accommodation” Requirement
In the recent decision in Howard v. Benson Group Inc., 2016 ONCA 256, the Ontario Court of Appeal provides straightforward but important lessons for employers who make use of fixed term employment contracts:
Continue Reading Fixed Term Employment Contracts – Important Lessons from the Ontario Court of Appeal
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)
Employment contracts can be frustrating, but they can also be frustrated. The former is a simple fact of life, while the latter is a key principle of contract law.
“Frustration” occurs where an unanticipated event destroys the heart of the contract to the point where it can no longer be fulfilled. When a contract becomes frustrated, the parties are relieved of any obligation they were contractually bound to perform. The legal concept, while simple in theory, has been difficult for employers to apply, particularly in the case of absences due to the critical illness or injury of an employee.
In the recent case of The Estate of Christian Drimba v Dick Engineering Inc., 2015 ONSC 2843 (“Drimba”), an Ontario court examined the concept of frustration in the case of the terminal illness of an employee who subsequently passed away. The case provides guidance to employers about the factors a court or tribunal may look at when making such a determination.
Continue Reading A Frustrating Employment Contract: When Does it End in the Case of Terminal Illness?
