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Court speaks on the enforceability of termination clauses and the mandatory minimums under the Employment Standards Act

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Generally employees must be provided with the minimum entitlements to notice, benefits and severance in compliance with the Employment Standards Act (ESA) upon termination without cause. If an employee is provided with less than what is required under this legislation due to their employment contract falling below those minimums, or failing to address those requirements altogether (e.g. failing to address the right to benefits continuation), the court will find those employment provisions void, and the employee will be awarded the right to common law pay in lieu of notice, which generally exceeds the legislative minimums. In the recent decision of Oudin, the court provided much needed clarity on this issue. 

In this case, the employee's employment contract contained a termination provision allowing the employer to terminate him in accordance with the minimum notice period as required by the ESA. The employee argued that, because the termination provision did not refer to the right of continuation of benefits and severance, the termination clause was inoperable and he was therefore entitled to greater common law protections. The court ruled in favor of the employer finding that the original intention of the parties in regards to the termination provision was to provide the employee with all his ESA requirements, although it did not expressly say so. The reference in the contractual provision to providing the employee with the minimal notice period under the ESA operated to secure to the employee all of the requirements under the ESA.

This decision provides important guidance in this unsettled area of law, which in the past has often prompted litigation merely due to termination clauses not explicitly referencing the mandatory ESA minimums awarded to all employees, regardless of the form of their employment contracts.

If you believe that you were wrongfully dismissed by your employer, do not face your struggle alone. De Bousquet PC has a proven track record of fighting for the rights of employees and we will help you obtain the best results in your case.

Oudin v. Centre Francophone de Toronto, 2016 ONCA 514

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