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Pay attention to employment contracts Pay attention to employment contracts Review or regret Pay attention to employment contracts Review or regret Review or regret

Many employers rely upon standard form employment contracts, believing that they are suffi M any employers rely upon standard form employment conM any employers rely upon standard form employment contracts, believing that they are suffi cient to meet tracts, believing that they are suffi cient to meet their specific cient to meet their specific hiring needs. their specific hiring needs. However, hiring needs. However, employers However, employers should have employers should have experienced should have experienced employment experienced employment law lawyers employment law lawyers regularly law lawyers regularly Junaid J. Malik Junaid J. Malik review their regularly review their Junaid J. Malik employ ment review their employ ment contracts, to ensure that the terms employ ment contracts, to ensure that the terms are valid and enforceable. The recent contracts, to ensure that the terms are valid and enforceable. The recent Court of Appeal for Ontario deciare valid and enforceable. The recent Court of Appeal for Ontario decision, Waksdale 2020 ONCA 391, is an Court of Appeal for Ontario decision, Waksdale 2020 ONCA 391, is an example of how employers would be sion, Waksdale 2020 ONCA 391, is an example of how employers would be wise to revisit their standard form example of how employers would be wise to revisit their standard form employment contracts. wise to revisit their standard form employment contracts. The employee in Waksdale was employment contracts. The employee in Waksdale was terminated on a “without cause” baThe employee in Waksdale was terminated on a “without cause” basis, this means that the employer did terminated on a “without cause” basis, this means that the employer did not allege cause justifying its decision sis, this means that the employer did not allege cause justifying its decision to end the employment relationship. not allege cause justifying its decision to end the employment relationship. Most employees who are terminated to end the employment relationship. Most employees who are terminated without cause have entitlements unMost employees who are terminated without cause have entitlements under the Employment Standards Act, without cause have entitlements under the Employment Standards Act, der the Employment Standards Act, 2000 (the 2000 (the “ESA”). Those entitlements “ESA”). Those entitlements include termination pay, and depend2000 (the “ESA”). Those entitlements include termination pay, and depending upon their length of service, sevinclude termination pay, and depending upon their length of service, severance pay, among other things. Eming upon their length of service, severance pay, among other things. Employers are not permitted to contract erance pay, among other things. Employers are not permitted to contract out of the terms of the ESA. ployers are not permitted to contract out of the terms of the ESA. An employee who is terminated out of the terms of the ESA. An employee who is terminated on a without cause basis is also “preAn employee who is terminated on a without cause basis is also “presumptively” entitled to common law on a without cause basis is also “presumptively” entitled to common law “reasonable notice.” Reasonable nosumptively” entitled to common law “reasonable notice.” Reasonable notice is determined by judges on a “reasonable notice.” Reasonable notice is determined by judges on a case-by-case basis, and it tends to tice is determined by judges on a case-by-case basis, and it tends to be a much more generous form of encase-by-case basis, and it tends to be a much more generous form of entitlement compared to entitlements be a much more generous form of entitlement compared to entitlements under the ESA. Reasonable notice is titlement compared to entitlements under the ESA. Reasonable notice is a “presumptive” entitlement in the under the ESA. Reasonable notice is a “presumptive” entitlement in the sense that the parties can contract a “presumptive” entitlement in the sense that the parties can contract out of it, in writing. This is a major sense that the parties can contract out of it, in writing. This is a major reason why employers rely upon out of it, in writing. This is a major reason why employers rely upon employment agreements. Properly reason why employers rely upon employment agreements. Properly drafted employment agreements alemployment agreements. Properly drafted employment agreements allow employers an opportunity to limdrafted employment agreements allow employers an opportunity to limit reasonable notice exposure when low employers an opportunity to limit reasonable notice exposure when the employment relationship comes it reasonable notice exposure when the employment relationship comes to an end by waiving the employee’s the employment relationship comes to an end by waiving the employee’s right to claim reasonable notice ento an end by waiving the employee’s right to claim reasonable notice entitlements. right to claim reasonable notice en titlements. The issue in titlements. The issue in Waksdale was that Waksdale was that the employment agreement conThe issue in Waksdale was that the employment agreement contained a with cause termination prothe employment agreement contained a with cause termination protained a with cause termination provision which attempted to contract vision which attempted to contract out of the ESA. The employee in vision which attempted to contract out of the ESA. The employee in Waksdale argued that the terminaout of the ESA. The employee in Waksdale argued that the termination provisions, read as a whole, were Waksdale argued that the termination provisions, read as a whole, were unenforceable since the with cause tion provisions, read as a whole, were unenforceable since the with cause provisions offended the ESA. unenforceable since the with cause provisions offended the ESA. Indeed, the employer in Waksdale provisions offended the ESA. Indeed, the employer in Waksdale conceded that the with cause terminaIndeed, the employer in Waksdale conceded that the with cause termination provisions were invalid. Though, conceded that the with cause termination provisions were invalid. Though, the employer argued that the illegal tion provisions were invalid. Though, the employer argued that the illegal with cause provisions were irrelevant the employer argued that the illegal with cause provisions were irrelevant because the employee was dismissed with cause provisions were irrelevant because the employee was dismissed on a without cause basis. The employbecause the employee was dismissed on a without cause basis. The employer added that the employee received on a without cause basis. The employer added that the employee received all of his ESA entitlements, and that er added that the employee received all of his ESA entitlements, and that he was not entitled to any reasonable all of his ESA entitlements, and that he was not entitled to any reasonable notice because of the written waiver he was not entitled to any reasonable notice because of the written waiver in the employment contract. notice because of the written waiver in the employment contract. Ontario’s Court of Appeal sided in the employment contract. Ontario’s Court of Appeal sided with the employee and held that it Ontario’s Court of Appeal sided with the employee and held that it did not matter that the employee was with the employee and held that it did not matter that the employee was terminated on a without cause basis did not matter that the employee was terminated on a without cause basis and received all of his ESA entitleterminated on a without cause basis and received all of his ESA entitlements. The fact that the with cause and received all of his ESA entitlements. The fact that the with cause terms were invalid was enough to ments. The fact that the with cause terms were invalid was enough to invalidate all of the termination proterms were invalid was enough to invalidate all of the termination provisions in the employment contract. invalidate all of the termination provisions in the employment contract. Consequently, this meant that the visions in the employment contract. Consequently, this meant that the reasonable notice waiver was invalConsequently, this meant that the reasonable notice waiver was invalid, thus entitling the employee to his reasonable notice waiver was invalid, thus entitling the employee to his common law reasonable notice. id, thus entitling the employee to his common law reasonable notice. Waksdale demonstrates how common law reasonable notice. Waksdale demonstrates how employment law in Ontario is not Waksdale demonstrates how employment law in Ontario is not a static area of law, and that ememployment law in Ontario is not a static area of law, and that employers should periodically review a static area of law, and that employers should periodically review and update their employment conployers should periodically review and update their employment contracts. and update their employment con tracts. tracts. Junaid J. Malik is a litigation Junaid J. Malik is a litigation associate with Brampton, Ont.-based Junaid J. Malik is a litigation associate with Brampton, Ont.-based Lawrences. associate with Brampton, Ont.-based Lawrences. Lawrences. Comment at Comment at www.woodindustry.ca. www.woodindustry.ca. Comment at www.woodindustry.ca.

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