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.
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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.
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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.
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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.
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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.
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