Clear And Unambiguous Termination Provision Provides Protection For Employer

The decision in Luney v. Day & Ross Inc. (2015, ONSC) ("Luney") demonstrates how clear, unambiguous termination provisions in an employment agreement can help an employer limit their liability when terminating an employee without cause.

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 agreement, 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 employment. There is no absolute limit on reasonable notice, but it will only exceed 24 months in exceptional cases.