Agreement to Provide Greater of Set Amount and ESA Minimums Legally Binding: ONCA

You know what’s fun? Trying to make sense of whether the court is going to give effect to a contractual termination clause. And, in the case of Amberber v. IBM Canada Ltd., 2018 ONCA 571, the Court of Appeal for Ontario was once again asked to do just that.

As set out by Justice Douglas K. Gray, sitting ad hoc, put it in the court’s introductory words to its reasons for decision:

The issue in this case is the enforceability of a termination clause in a written contract of employment. On a motion for summary judgment brought by the employer, Justice Hebner [Justice Pamela L. Hebner of the Superior Court of Justice] held that the termination clause was ambiguous, and did not clearly set out an intention to deprive the respondent of his entitlement to damages at common law. She held the clause to be unenforceable and dismissed the motion.

The employer, IBM, was successful on appeal.

Lack of Clear Warning Voids Termination Provision

Must an employer provide its employees with a clear warning that it intends to provide no more than the minimum amount of notice prescribed by the Employment Standards Act, 2000 in order to create a legally binding employment contract?

Does the failure to provide a clear warning to an employee that her employment may be terminated upon the provision of no more than the minimum amount of notice prescribed by the Employment Standards Act, 2000 create an ambiguity voiding the contractual termination provision?

In a decision of the Ontario Superior Court of Justice sitting at Ottawa, released February 6, 2018, Bergeron v. Movati Athletic (Group) Inc., 2018 ONSC 885, the Honourable Justice Michelle O’Bonsawin said that the answer to those questions is “yes.”

Court of Appeal Confirms that Silence is Golden

Silence is golden. According to that proverbial saying it is sometimes better to say nothing than to speak.

So what does this ancient saying, and 1964 The Four Seasons’ B-side, have to do with employment law? In short, in Nemeth v. Hatch Ltd., 2018 ONCA 7 (CanLII), the the Court of Appeal for Ontario essentially said as much when it comes to termination clauses.

Undertaking to Comply with the ESA does Not Displace Common Law Presumption of Reasonable Notice

Does an employer’s undertaking to “comply with its obligations under the employment standards legislation” displace the common law presumption of termination only upon the provision of reasonable notice?

In a decision released October 20, 2017, Nogueira v Second Cup, 2017 ONSC 6315 (CanLII), the Honourable Justice Edward M. Morgan of the Ontario Superior Court of Justice ruled that it did not.

Such decision is yet another in the long series of decisions to consider what it takes to contract out of such entitlement and, for the reasons that follow, it leaves this employment lawyer saying: ¯\_(ツ)_/¯

Scissors Beat Paper; Statutes Beat Scissors: Severability Clauses Can't Fix Illegal Termination Provisions

Everyone knows that in the classic children's game, Rock, Paper, Scissors, scissors beat paper. But can scissors beat statutes?

To the point, can a trial judge use a severability clause to excise the offending portion of a termination provision, keeping the remainder of such provision enforceable? While that question might seem highly academic, it is one of critical importance to anyone employed pursuant to the terms of a written employment contract.

In North v. Metaswitch Networks Corporation, 2017 ONCA 790 (CanLII), the Court of Appeal for Ontario finally laid to rest both this issue and its earlier decision in the much-maligned case of Oudin v. Centre Francophone de Toronto, Inc., 2016 ONCA 514.

Beware the Innocuous Termination Provision

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It is often said that, “a magician never reveals his secrets.” If that is true, then it is a good thing that I am not a magician.

There is a phrase employed in countless employment agreements, which, on its face, appears innocuous. As will be explained below, notwithstanding the fact that this one simple, seemingly benign phrase can cost workers literally thousands, if not tens or even hundreds of thousands of dollars, few employees will ever give a second thought to accepting such a contractual provision.

While I suspect that many employment lawyers know exactly to what I refer, I would suspect that few outside this union of magicians would have any clue to what I am making reference.

If a Termination Provision Potentially Violates the ESA, It Is Void: ONCA

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“If a [termination] provision’s application potentially violates the ESA at any date after hiring, it is void.”

In a very short endorsement released by the Court of Appeal for Ontario on April 5, 2017, Covenoho v. Pendylum Ltd., 2017 ONCA 284, Ontario’s top court confirmed what many of Ontario’s employment lawyers having been saying for years now: a poorly drafted employment agreement is going to prove costly.

Court of Appeal Finally Brings Much Needed Clarity to Issue of Benefits in Contractual Termination Provisions

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It’s here. On February 23, 2017, the Court of Appeal for Ontario released its much anticipated decision in Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 (CanLII).

After an initial reading of the case I tweeted, “I think we have our number one case of importance to Ontario Employment Law for 2017.” To which one observer responded, “Sean, it is only February! I will remember this tweet when you write your annual "Top 5" cases.” While I stand to be corrected in ten months, I was aware of the date when I authored that tweet.

While Wood is not quite everything that I had hoped it would be, it’s still a lot of things. It could well be the most important decision to Ontario employment law this year.

Will Wood Finally Answer the Question of Benefits? There’s Hope.

This post will break from tradition. Rather than be a post about something that has happened, it will be an anticipatory post about something that is expected to happen.

On September 6, 2016, the Court of Appeal for Ontario heard the appeal of the decision reached by Mr. Justice Grant Dow of the Ontario Superior Court of Justice in Wood v Fred Deeley Imports Ltd., 2016 ONSC 1412 (CanLII). Should the court choose to answer all of the questions put to it by the appellant, then I have no doubt that the decision will fundamentally alter the landscape of Ontario employment law.

UPDATE: On February 23, 2017, the Court of Appeal for Ontario released its much anticipated decision in Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 (CanLII). For analysis of that decision, see my post: Court of Appeal Finally Brings Much Needed Clarity to Issue of Benefits in Contractual Termination Provisions.

The ONCA’s Decision in Oudin v. CFT Leaves One 'Wundering' – Is Wunderman Dead?

Must the termination provision in an employment contract expressly employ the words “benefits” in order to be legally binding? Before the Court of Appeal for Ontario’s decision in Oudin v. Centre Francophone de Toronto, 2016 ONCA 514 (released June 28, 2016), I would have said “yes.” In fact, I said so rather emphatically in my earlier blog post “Benefits”: The Most Important Word in Ontario Employment Law. I mean, I declared the word “benefits” as “the most important word in Ontario employment law.” Perhaps I was mistaken.

Divisional Court endorses Wunderman, Rejects Ford v Keegan

If an employment contract’s termination provision has the potential to violate the Ontario Employment Standards Act, 2000, but is legally compliant at the time of termination is it legal or not?

The issue has been litigated several times. On February 16, 2016, the Honourable Justice Laurence A. Pattillo, writing on behalf of the Ontario Divisional Court, provided his position on the debate in the case of Garreton v Complete Innovations Inc., 2016 ONSC 1178 .