Increased Judicial Scrutiny In ON With Respect To Termination Clauses

Over the past year, Ontario Courts are increasingly finding ways to strike down termination clauses in employment agreements that have been negotiated by the parties. This line of case law in Ontario suggests that Courts will exercise their discretion to favour employees' rights when determining the enforceability of termination provisions.

Just Cause Termination Clause Rendered Entire Termination Provision Unenforceable

This trend began approximately one year ago with the Ontario Court of Appeal's decision in Waksdale v. Swegon North America Inc., 2020 ONCA 391 (Supreme Court Denies Leave to Appeal). In this decision, the employer had drafted an employment agreement that contained a without cause termination provision that complied with the statutory requirements under the Employment Standards Act (Ontario), and provided the employee with pay in lieu of notice in accordance with that provision. However, the employment agreement also contained a just cause