Contractual Severance: Failure To Pay Means Employer Pays More

A recent Ontario court decision confirms the approach under Canadian law to cases where an employer fails to pay the contracted severance amounts: if the employer does not comply with the terms of the contract, that amounts to repudiation, and the employee will have a more valuable, common law claim for enhanced severance.

In Timmins v. Artisan Cells, CanLii 2387, Justice Callaghan of the Ontario Superior Court found that the employer, Artisan, had, 'by their correspondence and actions,' repudiated the agreement it had with Nicholas Timmins. In particular, the case arose when Timmins was dismissed without cause in 2023. When he was terminated, Artisan said in the termination letter that it would provide one week of termination pay, plus other amounts in exchange for a release.