Are Your Company’s Termination Provisions Enforceable?

Two Ontario Superior Court decisions once again highlight the importance of precise and explicit wording in employment contracts, particularly in respect of termination clauses. The court concluded in both decisions that the dismissed employee was entitled to reasonable notice at common law because the termination clause in the employment contract failed to comply with minimum employment standards legislation and was not enforceable.

Background

Where an employer does not have cause to terminate a non-union employee and where there is no provision specifying the period of notice of termination or the duration of employment in an employment contract, there is an implied obligation at law on the part of an employer to provide "reasonable notice" of termination or pay in lieu of notice. At common law, reasonable notice of termination varies depending on factors such as the employee's age, length of service, character of employment and availability of alternate