Many are not aware that the employment relationship between an employer and employee is a type of contract.
TERMINATION PROVISIONS
Reasonable Notice
Employment contracts in Canada and Ontario are often much more complicated than most contracts, since special employment law imposed rules are grafted upon them. See Slater v. Sandwell(1994), 5 C.C.E.L. (2d) 308 (Ont. Ct. (Gen.Div.) and Machinger v. HOJ(1992), 91 D.L.R. (4th) 491 (S.C.C.). An employment contract exists between an employee and employer, even if it has never been placed into writing. Employment contracts are important because they let the parties determine specific terms and conditions that will govern the employment relationship. Due to the special nature of employment contracts, not all terms of the contract are enforceable by operation of law. Often employment agreements contain clauses that are not binding on the employee or the employer. Examples include improperly drafted termination provisions and other unfair or “unconscionable” terms.
Reasonable notice is a very important concept in employment law. As explained in the article titled “Wrongful Dismissal and Just Cause”, an employer can terminate a non-unionized employee for almost any reason that is not discriminatory or reprisal against the employee. However, an employee who is terminated for “just cause”, meaning they are guilty of wilful misconduct, disobedience or neglect, is not entitled to notice of termination or pay in lieu of notice under the Employment Standards Act. If an employee is terminated without cause, the employer must provide the employee with the appropriate notice of termination, or pay in lieu of notice of termination. At the very least, the employee is entitled to the minimums contained in the Employment Standards Act. However, the employee can seek common law reasonable notice, which usually works out to a higher amount.
Employment Standards Act
In an effort to limit paying more termination pay, employment contracts often include a termination provision, which will limit the amount of termination or severance pay that the employee is able to receive. If done properly, the termination provision can displace the presumption of common law reasonable notice that an employee would otherwise receive. However, a termination provision must be unequivocal, explicit and found to be a valid term of the employment agreement for this to occur. Technical violations of employment standards legislation like the Employment Standards Act can render harsh termination provisions void. The result of this can be very dramatic. Contracts which purport to limit statutory severance to a few weeks can be declared illegal, with common law reasonable notice of several months being substituted by the court.
Recent cases in this regard include decisions such as: Miller v A.B.M. Canada Inc. 2014 ONSC 4062; Wright v. Young & Rubicam Group of Companies, 2011 ONSC 4720 and Stevens v Sifton Properties Ltd., 2012 ONSC 5508. In order to be valid, termination provisions must acknowledge the minimum notice periods that are set out in the Employment Standards Act, among other requirements. General contract law principles such as unconscionability, undue influence and duress also apply to employment contracts and termination provisions. Please note that the above information does not constitute legal advice. It is general information about the law. If you require legal advice and assistance in an employment matter, please contact the experts at Stacey Ball – Employment Lawyer in Toronto.
TERMINATION PAY
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Dependent Contractor v. Employees
August 27, 2019Stacey R. BallWhat is a Dependent Contractor? A workers relationship generally falls into one of three classifications: employee, dependent contractor or independent contractor. Dependent contractors are seen as the in-between category of workers—basically if one is held to be a contractor and not an employee at first instances, the legal test will assess whether the worker is an independent or dependent contractor.The...
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Independent Contractor v. Employee
August 31, 2019Stacey R. BallWhat’s the Difference? Businesses use a variety of different workers for varying purposes. Employees may be hired for indefinite or fixed term employment and consultants or independent contractors can be retained to provide services on a project basis without ever becoming employees. There are differences between the two categories and each poses their own legal implications in the event of...
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No Interruption in Employee’s Length of Service Despite “New”...
January 15, 2020Stacey R. BallThe Ontario Court of Appeal released its decision and confirmed that courts will overlook the differing corporate structures utilized by companies to skirt around an employee’s length of service and continuity in employment. Call Employment contracts lawyer for consultation. Facts In Theberge-Lindsay v. 3385022 Canada Inc. (Kutcher Dentistry Professional Corporation), 2019 ONCA 469, a dental hygienist was employed with the defendant for...
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Termination Lawyer Toronto
September 2, 2020Stacey R. BallAn employer does not need a good reason, or any reason at all, to terminate an employment relationship. However, the obligations of the employer and what is owed to the employee after termination depends on whether an employee was terminated “with cause” or “without cause.”
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What You Need to Know About a Fixed-Term Employment...
April 5, 2021Stacey R. BallIn this blog, we will explore some common issues that a fix-term contract employee may have in their employment relationship. Fixed Term vs. Indefinite Term Whether a contract of employment is of a fixed or indefinite duration will often be a significant finding.For the indefinite term contracts, the employment relationship is one of continuous service, which is intended to last for...
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Are Work Hours Regulated in Ontario?
August 10, 2021Stacey R. BallHow many hours per week can your employer expect or require you to work? How many hours per day? These are questions anyone who works long hours will inevitably ask themselves. Fortunately, work hours are indeed regulated in Ontario and there are maximum amounts of hours per week and per day that an employee can be required to work....
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Employment Insurance and Without Cause Termination
August 11, 2021Stacey R. BallIf you have been terminated without cause, you will be eligible to collect Employment Insurance (“EI”). If you were terminated for cause, you will not be eligible for EI. Without cause termination occurs where your employer terminates you without you having done anything seriously wrong to warrant the termination. The very purpose of EI is to provide temporary income...
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Who Is Eligible For Pregnancy / Parental Leave in...
August 12, 2021Stacey R. BallPregnancy Leave and Parental Leave In Ontario, pregnancy leave (i.e., maternity leave) and parental leave are governed by the Employment Standards Act (“ESA”), which establishes minimum employment requirements or standards that all employers must comply with. Under the ESA, pregnant employees have the right to take up to 17 weeks of unpaid time off work. This is known as a...
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The Importance of Language in Employment Contracts: Termination Clauses
August 27, 2021Stacey R. BallEmployment contracts are complicated documents. They need to be just right. Any mistake, however small, could potentially be catastrophic. Entering the wrong words, even so much as two, can have serious consequences. In Lamontagne v. J.L. Richards Associates Ltd., 2021 ONSC 2133, a recent Ontario decision, this is exactly what happened. At issue in this case was the enforceability...
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When Can An Employee Rescind Their Resignation?
September 1, 2021Stacey R. BallIdeally, you would never resign from a job unless you were absolutely sure that you wanted to. But mistakes happen. Is it possible to “take back” (or rescind) your resignation after it has already been given? Submitting a Valid Resignation In order for this issue to even arise, you must have submitted a resignation. However, a resignation must meet certain requirements...
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Is it Possible to Work Without an Employment Contract...
September 29, 2021Stacey R. BallYou do not need to sign an employment contract in order to work in Ontario. However, it is also not possible to be working in Ontario without a contract. This is because it is impossible to be in an employment relationship without also being in a contractual relationship. In Ontario, a contractual relationship exists the moment an employment relationship...
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Reasonable Notice: Length of Service Does Not Require Mathematical...
December 1, 2021Stacey R. BallReasonable Notice: Length of Service Does Not Require Mathematical Certainty In determining reasonable notice of termination periods, courts today continue to be guided by the seminal decision Bardal v. Globe & Mail Ltd. and in particular the following passage:“The reasonableness of the notice must be decided with reference to each particular case, having regard to the 'character of the employment,...
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British Columbia to Give Workers Five Days of Paid...
December 24, 2021Stacey R. BallIt was recently announced that, as of January 1st, 2022, British Columbia will be the first and only province in Canada to provide all their workers (even those working part-time) with five days of paid sick leave each year. The change was announced by Labour Minister Harry Bains at a press conference on November 24th, 2021. It will be...
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Mandatory Vaccination Policy Found Unreasonable in Arbitration
December 26, 2021Stacey R. BallIn early November, 2021, Arbitrator John Stout was tasked with deciding whether or not the mandatory vaccination policy introduced by the Electrical Safety Authority (“ESA”) was reasonable. This is currently a very hot issue, as many employees throughout Ontario are finding their employment jeopardized as a consequence of workplace vaccine mandates.The ESA has a reputation as a safety organization....
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TTC Union Loses at Court: No Injunction for Vaccine...
December 28, 2021Stacey R. BallOn September 7th, 2021, the Toronto Transit Commission announced its mandatory vaccination policy. According to this policy, employees or dependent contractor who have not had their COVID-19 vaccine would be placed on unpaid leave beginning November 21st. Those who remained unvaccinated would then be terminated with cause (i.e., without any severance pay) on December 31st. Unsurprisingly, not everybody at the TTC...
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More Evidence that COVID-19 Can Increase Notice Periods
December 30, 2021Stacey R. BallNot long ago, the Ontario decision Kraft v. Firepower Financial Corp. demonstrated the willingness of courts to award higher notice periods to employees who demonstrated clear mitigation efforts in spite of the many difficulties stemming from the COVID-19 pandemic and its crippling effects on the job market. Lest we began to believe such a holding was an anomaly, the...
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The Necessity of Consideration – Matijczak v. Homewood Health...
January 1, 2022Stacey R. BallThis recent decision of the British Columbia Supreme Court touches on a fundamental principle of contract law: that a contract is not enforceable unless consideration (i.e. something of value, including promises to do something) has been given in exchange. Where there is an agreement between two parties and one of those parties is offering nothing to the other, then...
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What Makes a Manager? Saunders v WestJet, an Alberta...
January 5, 2022Stacey R. BallMs. Saunders was an agency sales representative with WestJet, her employer. She was terminated from this position on July 29, 2019. Following her termination, Ms. Saunders filed a complaint of unjust dismissal under section 240(1) of the Canada Labour Code (the “Code”). A finding that Ms. Saunders was unjustly dismissed under the Code would entitle her to reinstatement with...
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Three Days of Work, Three Months of Pay: Dalton...
January 7, 2022Stacey R. BallEmployers should expect to provide some compensation to employees they terminate without cause. The amount of compensation depends on a number of factors, such as the nature of the employment, the availability of similar employment, the age of the employee, and the amount of time the employee spent working for the employer. These factors are not always given equal...
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Constructive Dismissal Resulting in High Damage Award Upheld by...
January 9, 2022Stacey R. BallMcGuinty v. 1845035 Ontario Inc. (McGuinty Funeral Home) is a case unlike many others, in the sense that it involved a particularly large award of wrongful dismissal damages: $1,274,173.83. There are not many scenarios in the context of employment law which could support such an immense award of damages. So alarmingly high was the award that the defendants actually...
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Sokoloff Lawyers Successful Injunction Against Former Employee
January 11, 2022Stacey R. BallIn a recent decision of the Ontario Superior Court, popular personal injury law firm Sokoloff Lawyers won an injunction against six former employees who had been working out of the firm’s Brampton office. Notably, Savannah Chorney, the leading lawyer at the Brampton office, had plans to start her own firm and intended to work out of the very same...
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Fixed Term Contracts as a Form of Reasonable Notice
March 1, 2022Stacey R. BallWhen considering the duration of an employment relationship, there are two primary options: either the employment period is for a fixed term, meaning the parties agree that the relationship lasts only until a specified date, or the employment period is indefinite, meaning it continues until it is terminated, for example, by the employee resigning or being fired.The distinction is...
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Employment Contract Successfully Limits Common Law Reasonable Notice
March 5, 2022Stacey R. BallIt is well known that employment contracts of an indefinite period (i.e., not fixed term contracts) give rise to a duty wherein employers must give reasonable notice, or pay in lieu of such notice, to employees whose employment is being terminated without cause. The Employment Standards Act, 2000 provides the absolute minimum period of notice required by such a...
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Non-Compete Provision Upheld Notwithstanding Working for Workers Act, 2021
May 20, 2022Stacey R. BallIn November 2021, the Ontario government passed the Working for Workers Act, 2021, new legislation that, among other things, prohibits non-competition clauses in employment agreements. However, a recent decision of the Ontario Superior Court revealed a reluctance to apply the prohibition to non-compete clauses that already exist. Parekh et al v. Schecter et al The Facts The Plaintiffs, in this case,...
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Unsigned Employment Contract Upheld by B.C. Court
May 21, 2022Stacey R. BallMany employees might believe that because they never physically signed their written employment agreement, it does not apply to them. A recent decision of the Supreme Court of British Columbia, however, might suggest otherwise. Here, a termination provision found within an unsigned employment contract was upheld. The Facts and Impugned Termination Provision The employee in this case had worked for the...
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Secretly Recording Co-Workers: Just Cause for Dismissal?
May 22, 2022Stacey R. BallIn a recent decision of the British Columbia Supreme Court, Justice Branch was tasked with determining whether or not “the surreptitious recording of one’s fellow employees” could serve as a proper basis for dismissal. The Parties This case concerned the termination of Mr. Shalagin from his position as a senior financial analyst with the defendant employer, Mercer Celgar Limited Partnership (“Mercer”),...
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An Employees Right to Disconnect After Working Hours
August 25, 2022Stacey R. BallA common complaint from employees (and their family and friends) is that they cannot seem to get away from work, even after they’ve left the office to go home at night. Technology has allowed many individuals to take their work home with them, which was only been exacerbated by the pandemic because so many people were, and continue to...
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Return to Office Looms – What Employers and Employees...
September 27, 2022Stacey R. BallNow that Labour Day has passed, the expectation is that more Employers will continue to request that their employees return to the office. Bay Street law firms, big banks and companies such as Apple have announced that their employees will be returning to the office in a hybrid format. While not every company will require its employees to return...
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Illegal Termination Clauses and Fixed Contracts
October 4, 2022Stacey R. BallAlmost all employment contracts include a termination clause. Yet, not all termination clauses are enforceable. The consequences of this can be severe for an employer. This is well exemplified in the 2022 Ontario Superior Court decision, Tarras v. The Municipal Infrastructure Group Ltd. Background: In late 2019, Plaintiff, Mark Andrew Tarras, agreed to a three-year, fixed-term employment contract with Defendant, The...
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New Minimum Wage Law in Ontario
November 12, 2022Stacey R. BallThe minimum wage is one of the most talked about employment laws, as it is something that overtly affects so many people in Canada. Depending on what province you are in and on your employment contracts, you may have a different minimum wage compared to Ontario (which is the focus of this post).As of October 1st, 2022, a new...
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Break In Service Time
November 21, 2022Stacey R. BallA common issue terminated employees have is that they may have left their employer for a period of time and then rejoined at a later date. It is very important to determine if there has been a break in service as this could drastically change termination entitlements at common law. The Ontario Court of Appeal recently dealt with this...
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short-service-employees-large-severance-package
January 7, 2023Stacey R. BallEmployees terminated after being employed for a short period of time commonly believe they are entitled to a small severance package. However, this is not always the case. Under common law, individuals who are terminated without cause must be given reasonable notice or paid in lieu of notice.Determining how much severance pay one is owed depends on a number...
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