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Another Successful Effort to Confine Employees to Statutory Minimum Termination Notice/Pay


By Hugh McPhail, Q.C.

Over recent years there have been several successful attacks on employment contract language as employers failed in their attempts to limit employees to the statutory minimums for notice of termination of employment. Not long ago, we reported on a recent Alberta decision which bucked the trend and upheld effective language in an Alberta contract. Another important development arose yesterday when the Supreme Court of Canada refused leave to appeal an Ontario decision which upheld the validity of the following language in an Ontario employment contract (translated from the French):

The CFT may also terminate this agreement for any other reason by giving the employee 15 days’ notice or the minimum notice required under the Employment Standards Act or by paying an amount of salary equal to the salary the employee would have had the right to receive during the notice period (after deduction and/or withholding at source), in the entire discretion of CFT.

The Ontario Court of Appeal decision, which was thus upheld, can be found by clicking here.

Employment contracts/hiring letters can be effective in limiting an employee’s rights to termination notice and pay. The language must be very clear and respect has to be paid to the statutory minimums or the clause will be ignored by the courts. It is prudent to periodically review templates to ensure that the employer objectives are going to be met because, if limiting language is ineffective, employer are left with costly and unpredictable claims for “reasonable notice” to be determined in the broad discretion of a trial judge.

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