No mention of severance pay or benefit continuation … No worries! Termination provision enforceable nonetheless!

November 20, 2016 - by: Rachel Younan 0 COMMENTS

by Rachel Younan

Recent case law has overwhelmingly rejected termination clauses that purport to limit an employee’s entitlements upon termination to the minimum notice required by applicable employment standards legislation. In Ontario, provisions that have failed to reference severance pay and/or benefit continuation have been found to be invalid, resulting in common law notice that far exceeds the intended contractual entitlement. The 2015 Ontario Superior Court of Justice decision in Oudin v. Le Centre Francophone de Toronto, 2015 ONSC 6494, diverged from that case law and, this summer, was upheld by the Ontario Court of Appeal, 2016 ONCA 514.

Facts

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‘You must be actively employed to receive bonus’—or not, says Ontario court

October 02, 2016 - by: Shane Todd 0 COMMENTS

by Shane Todd

In an attempt to their limit severance exposure, employers often require that an employee be “actively employed” on the bonus payment date in order to be eligible to earn a bonus. The idea being that the severance payable to a dismissed employee would not have to take into account an employee’s bonus earnings as the employee would not be able to satisfy the “active employment” requirement contained in the applicable bonus plan. However, as the Court of Appeal for Ontario recently confirmed in Paquette v. TeraGo Networks Inc., 2016 ONCA 618, “active employment” requirements are insufficient to remove or limit a dismissed employee’s rights.

What happened

Trevor Paquette was employed by TeraGo Networks for 14 years. He earned a base salary and was eligible for an annual bonus. The bonus plan required Paquette to be “actively employed” at the time the bonus was paid in order to receive it. In November 2014, Paquette was terminated without cause. The parties could not agree on a severance package and so Paquette sued TeraGo for wrongful dismissal. read more…

Nonunionized federal employees in Canada insulated from without-cause dismissals

August 07, 2016 - by: Christopher Pigott 0 COMMENTS

by Christopher Pigott

A sharply divided Supreme Court of Canada recently overruled the Federal Court of Appeal and held that, subject to narrow exceptions, federal employers are not entitled to terminate nonunionized employees without cause (Wilson v. AECL). This prohibition applies even if the employer is willing to provide generous notice and severance pay. read more…

Early termination of fixed-term contract proves costly

July 17, 2016 - by: Jacqueline Gant 0 COMMENTS

by Jacqueline Gant

The highest court in Ontario recently ordered an employer to pay out a whopping three years of compensation to a 23-month employee terminated without cause. The employee was entitled to his full salary and benefits for the remainder of the five-year fixed-term employment contract. The contract did not clearly say otherwise. In Howard v. Benson Group Inc., this meant the employer had to pay over $200,000 in damages. read more…

Damages for wrongful dismissal: Who must prove what?

June 05, 2016 - by: Keri Bennett 0 COMMENTS

by Keri Bennett

As noted in past articles here, Canadian employees can sue for lack of adequate notice of termination. Fired employees seeking damages for inadequate notice have a corresponding duty to mitigate or minimize any resulting losses. If other work is available, their losses may be minimal. Employees frequently claim a lack of available work. But who must prove what?

In a recent decision, the British Columbia Court of Appeal ruled that where lack of work is claimed, the employee must prove it. It is not up to the employer to prove the opposite. read more…

Sleep much? Board finds that dozing off on the job is not willful misconduct

April 24, 2016 - by: Avneet Jaswal 0 COMMENTS

by Avneet Jaswal

Can an employer terminate an employee for sleeping on the job on multiple occasions? The Ontario Labour Relations Board concluded that such behavior may give rise to just cause for dismissal. Can sleeping on the job amount to “willful misconduct” eliminating the employer’s obligation to pay statutory notice and severance amounts? Well, that depends. read more…

It’s not you, it’s the economy: making difficult employment decisions during a downturn

April 10, 2016 - by: Northern Exposure 0 COMMENTS

by Kyla Stott-Jess and Claire Himsl

In the face of an economic downturn, some employers across Canada are being forced to tighten their belts and make hard choices about workforce downsizing. However, what may initially begin as a cost-cutting exercise can quickly turn into a legal quagmire if the process is not executed properly and with sufficient advance planning. read more…

‘You’re fired’—for watching TV too much

March 27, 2016 - by: Sophie Arseneault 0 COMMENTS

by Sophie Arseneault

Canadian employment law does not recognize “at will” employment. An employer requires “just cause” to terminate someone without severance pay. Can you have a just cause termination for a 26-year employee with a previously clean employment record? read more…

‘Poor’ employer’s termination obligation not reduced

February 07, 2016 - by: Hannah Roskey 0 COMMENTS

by Hannah Roskey

There has been some controversy in Canadian law on the issue of whether the financial circumstances of the employer should play a role in deciding what constitutes reasonable notice of termination or pay in lieu of notice. Since multiple factors go into deciding what’s reasonable in many circumstances, why not this one?

This controversy was recently resolved by the Ontario Court of Appeal in Michela v. St. Thomas of Villanova Catholic School. The court overturned a lower court ruling that had reduced the normal, reasonable notice period because of the poor financial position of the employer that had to terminate the employees. The appeal court found that this was not a relevant factor.

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An abbreviated case for cause

January 24, 2016 - by: Keri Bennett 0 COMMENTS

by Keri Bennett

We all know litigation is expensive. That’s particularly true when an employer seeks to justify a for-cause termination. But there may be an alternative to protracted litigation. In Cotter v. Point Grey Golf and Country Club, the British Columbia Supreme Court proceeded in an abbreviated way. It recently allowed a for-cause termination matter to proceed by a short summary trial, saving the employer thousands of dollars in legal fees. And the result was great, too. The court confirmed that the employer had cause to terminate. read more…

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