A New Direction For The Enforceability Of Termination Clauses?

Many employers are often surprised to hear that the Employment Standards Act, 2000 (the "ESA") is not the starting point for determining how much notice of termination an employee is owed. Rather, an employee is presumptively owed reasonable notice at common law, which is rebuttable if the employment agreement clearly sets out an entitlement to notice which does not violate the ESA or some other statute, such as the Human Rights Code.¹

Recently, several cases have highlighted the difficulty that employers face when drafting termination clauses that comply with the minimum requirements set out in the ESA. In Wright v The Young and Rubicam Group of Companies (Wunderman),² the court held that if a termination clause does not provide for an employee's minimum notice period and full benefit continuation as required by the ESA, the clause is void and unenforceable. Subsequent cases have struggled with the further issue of whether a termination clause must comply with the ES