MANY EMPLOYERS HAVE RELIED ON TERMINATION CLAUSES TO ENSURE THAT
EMPLOYEES DON’T BECOME ENTITLED TO “COMMON LAW” REASONABLE
NOTICE, WHICH IS OFTEN SIGNIFICANTLY HIGHER THAN ESA AMOUNTS.
of “active employment.” Instead, employers
need to craft specific language that
removes any entitlement to damages for
lost bonus or the lost opportunity to
earn a bonus.
4. TERMINATION CLAUSES
AND ENTITLEMENTS TO
BENEFITS OVER THE NOTICE
WHAT THE LAW WAS:
Often, employers will use a termination
clause in their employment contract in
order to limit an employee’s entitlements
upon termination. An employer can stipulate
the amount of reasonable notice
an employee is entitled to, as long as it
doesn’t go below minimum standards
provided under employment standards
legislation (ESA). Many employers have
relied on termination clauses to ensure
that employees don’t become entitled to
“common law” reasonable notice, which
is often significantly higher than ESA
In 2012, the enforceability of termination
clauses in Ontario came into
question in the case of Stevens v. Sifton
Properties. In this decision, an employee
was terminated without cause and provided
three weeks’ pay in lieu of notice as
outlined in the termination clause of her
employment letter. In addition to three
weeks’ pay, the employer also paid the
employee’s outstanding vacation entitlements
and continued to pay her benefits
during the period of reasonable notice.
The employee brought an action for
wrongful dismissal and claimed that the
termination provisions in her employment
letter violated the ESA by denying
entitlement to benefits during the statutory
notice period. As a result, the
employee claimed that the termination
clause was a nullity and that she was entitled
to common law reasonable notice.
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Project : Annonce MMI 2016
Client : TD Assurance
Province : Ontario
Publication : HR Professional
Size : 7.125x4.75
Proof # : 2
Due date : 12/14/2016
Continued on page 18
16 ❚ SPECIAL CONFERENCE EDITION 2017 ❚ HR PROFESSIONAL