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ARTICLE · 10 JANUARY 2018

Drafting Termination Clauses – Be Careful That Your Fail-Safe Provision Is Safe And Doesn't Fail

McMillan LLP
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Amberber provides both specific and general lessons to employers.

CanadaEmployment and HR
Kyle Lambert
Kyle Lambert
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Recently, commentary on Ontario employment law developments has been heavily focused on the use and construction of termination clauses in employment contract (when not covering Bill 148, of course). The late 2017 decision in Amberber v. IBM Canada Ltd. adds another wrinkle to the termination clause discussion. In this case, the wrinkle involves the proper use of "fail-safe provisions" – catch-all concluding statements added to termination clauses which typically state that employees shall always receive at least their minimum notice/severance entitlement under the applicable employment standards legislation.

In Amberber, the defendant brought a motion for summary judgment to dismiss a wrongful termination claim on the ground that it had given the plaintiff pay in lieu of notice in accordance with his employment contract. The contract contained a termination clause which had two options for calculating the notice payment. It also stated the following:

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