tag:blogger.com,1999:blog-7916767120530431852.post603704099475896923..comments2024-03-23T13:03:48.917-04:00Comments on Labour Pains: Court of Appeal Finally Brings Much Needed Clarity to Issue of Benefits in Contractual Termination ProvisionsSean Bawdenhttp://www.blogger.com/profile/12478582658843470140noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7916767120530431852.post-8540396812223736662017-02-28T10:50:12.605-05:002017-02-28T10:50:12.605-05:00Don't the decisions on this issue essentially ...Don't the decisions on this issue essentially encourage employers to craft employment contracts where only the ESA minimums are provided on termination rather than trying to craft something that provides less than common law but more than the ESA? At this point it seems much easier to craft an ESA minimum only provision, and from my (admittedly limited) vantage point the decisions where clauses have been upheld appear to be ESA minimum only provisions. Essentially, employers are getting taken to task for trying to craft a more generous termination clause. <br /><br />- Adrian Di LulloAnonymoushttps://www.blogger.com/profile/16451598909014853542noreply@blogger.comtag:blogger.com,1999:blog-7916767120530431852.post-22461022442578104472017-02-27T16:48:06.996-05:002017-02-27T16:48:06.996-05:00Thanks for the mention, Sean!
To follow up on A...Thanks for the mention, Sean! <br /><br />To follow up on Andrew's comment, there haven't been very many cases where the lack of the "Porky Pig" clause has spelled doom for the contract. Perhaps this is the next big fight, though, given that there are other decisions this year where Singh was considered and not applied- See for example Cook v Hatch, 2017 ONSC 47, in which the employer got summary judgment on the basis that a Porky-less termination clause was nevertheless enforceable.<br /><br />In any event, while I am really happy that Wood has cleared up some things, another loose end may have inadvertently been created/left unresolved here. Specifically, the comment at the end of para. 40: <br /><br />"where the language of a termination clause is unclear or can be interpreted in more than one way, the court should adopt the interpretation most favourable to the employee."<br /><br />My question is: when we should be figuring out which meaning is more advantageous to the employee? <br /><br />For example, say you have a contract that provides 3 weeks' termination pay per year of employment, but it has an ambiguity. <br /><br />Let's also say that the employee has 25 years' service and is 63 years old. Common law would likely see that employee get something significantly more than 17 months' notice/pay in lieu (which is roughly the contractual entitlement). <br /><br />So, by the logic in Wood, the contract is void for ambiguity and the employee is entitled to common law reasonable notice because that is more advantageous to the employee.<br /><br />But then suppose that sometime after the employee commences litigation, and before the 17 months' contractual notice pay has run out, the employee finds a new job making twice as much as her old job.<br /><br />Is the employment agreement back to being valid again, such that the employee gets the full 17 months of pay in lieu set out in the contract? Or can the employer simply take the position that the employee was right, the agreement was void, and it doesn't owe her another cent at common law?<br /><br />It strikes me as unseemly to have a shifting determination as to the validity of a contract on the basis of what happens later. This seems to fly in the face of the comment at para. 45 of Wood. It also seems odd to imagine a case where both parties do a complete flip-flop on their respective positions regarding the legal validity of the contract halfway through the litigation.<br /><br />My view- if the contract is valid no matter how you resolve the ambiguity and both interpretations are equally plausible taking into account all of the other evidence, then yes, it should be resolved by recourse to contra proferentum such that the interpretation most favourable to the employee prevails (assuming the employer drafted the agreement).<br /><br />BUT- we shouldn't be having the courts create "Lazarus contracts" on the basis of what later becomes more advantageous to the employee. If it's void, it's void, never to rise again.<br /><br />On the other hand, if you have a contract where the possibilities for resolving the ambiguity are equally plausible, and one means it's valid and the other means it's void, then I'm not sure why we should be rushing to kill the contract unless there is some evidence that the illegal interpretation was intended.<br /><br />I'm sure that one will be a hard sell, but I suppose time will tell if I can be prophetic two years in a row!Melissa Sealhttp://www.tmlegal.ca/profile/melissa-seal/noreply@blogger.comtag:blogger.com,1999:blog-7916767120530431852.post-79628201525058089642017-02-26T15:58:11.996-05:002017-02-26T15:58:11.996-05:00Well written, I agree it will be in the top cases....Well written, I agree it will be in the top cases. As noted employers who include 'and that's all folks' clauses have issues with illegality, as in the Wood case where this is highlighted (as in Sifton).<br /><br />However on the flip side the failure to include such a clause can result in a finding that the clause does not contract out of reasonable notice, see Singh v. Qualified Metal Fabricators (2016 CarswellOnt 8795) & Vinette v. Delta Printing Limited, (2017 ONSC 182) among others.<br /><br />It's a catch 22 that makes enforcement difficult, although obviously not impossible.<br /><br />-Andrew MonkhouseAnonymoushttps://www.blogger.com/profile/17906948214726365136noreply@blogger.com