Law

Pay attention to employment contracts Review or regret

Many employers rely upon standard form employment conemployers rely upon employment agreements. Properly drafted tracts, believing that they are sufficient to meet their specific hiremployment agreements allow employers an opportunity to limit ing needs. However, employers should have experienced employreasonable notice exposure when the employment relationship ment law lawyers regularly review their employment comes to an end by waiving the employee’s right to claim reasoncontracts, to ensure that the terms are valid and enforceable notice entitlements. able. The recent Court of Appeal for The issue in Waksdale was that the employment agreement Ontario decision, Waksdale 2020 ONCA contained a with cause termination provision which attempted 391, is an example of how employers to contract out of the ESA. The employee in Waksdale argued that would be wise to revisit their standard the termination provisions, read as a whole, were unenforceable form employment contracts. since the with cause provisions offended the ESA. The employee in Waksdale was Indeed, the employer in Waksdale conceded that the with terminated on a “without cause” basis, cause termination provisions were invalid. Though, the employer this means that the employer did not argued that the illegal with cause provisions were irrelevant beallege cause justifying its decision to cause the employee was dismissed on a without cause basis. The end the employment relationship. Most employer added that the employee received all of his ESA entitleJunaid J. Malik employees who are terminated without ments, and that he was not entitled to any reasonable notice because have entitlements under the Emcause of the written waiver in the employment contract. ployment Standards Act, 2000 (the “ESA”). Those entitleOntario’s Court of Appeal sided with the employee and held ments include termination pay, and depending upon that it did not matter that the employee was terminated on a with their length of service, severance pay, among other out cause basis and received all of his ESA entitlements. The fact things. Employers are not permitted to contract out of that the with cause terms were invalid was enough to invalidate all the terms of the ESA. of the termination provisions in the employment contract. Conse An employee who is terminated on a without quently, this meant that the reasonable notice waiver was invalid, cause basis is also “presumptively” entitled to common thus entitling the employee to his common law reasonable notice. law “reasonable notice.” Reasonable notice is determined Waksdale demonstrates how employment law in Ontario by judges on a case-by-case basis, and it tends to be a is not a static area of law, and that employers should periodically much more generous form of entitlement compared to review and update their employment contracts. entitlements under the ESA. Reasonable notice is a “presumptive” entitlement in the sense that the parties can Junaid J. Malik is a litigation associate with contract out of it, in writing. This is a major reason why Brampton, Ont.-based Lawrences. FREE SUBSCRIPTIONS FREE SUBSCRIPTIONS FREE SUBSCRIPTIONS COMMENTARY FEATURES COLUMNS NEWS PRODUCTS ASSOCIATIONS FREE SUBSCRIPTIONS COMMENTARY FEATURES COLUMNS NEWS PRODUCTS ASSOCIATIONS FREE SUBSCRIPTIONS COMMENTARY FEATURES COLUMNS NEWS PRODUCTS ASSOCIATIONS FREE SUBSCRIPTIONS Coverings monthly e-letter:

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