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ARTICLE · 09 MARCH 2012

Close Judicial Scrutiny Renders Termination Provision Unenforceable

Stikeman Elliott LLP
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A recent decision of the Ontario Superior Court of Justice proves that employers cannot be too careful when drafting termination provisions.

CanadaEmployment and HR
Kathleen Chevalier
Kathleen Chevalier
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A recent decision of the Ontario Superior Court of Justice proves that employers cannot be too careful when drafting termination provisions. The Court held, among other things, a potential contravention of the Employment Standards Act, 2000 was sufficient to render a termination provision unenforceable, even if at the time of termination the provision provided the employee with an amount in excess of his ESA entitlements.

At the time of termination, the Plaintiff had served the Defendant for more than five years, and most recently was President of the Defendant's organization. The Plaintiff's employment was governed by an employment agreement, which contained the following termination provision:

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