It is fairly common for a written employment agreement to seek
to limit an employee’s termination notice to the minimum
amount prescribed under employment standards legislation. However
past case law suggests that doing so may be more difficult than it
seems. Two new decisions from the Alberta and Ontario Courts of
Appeal have examined the question, highlighting the problems that
can arise from an improperly drafted termination clause.
In Holm v AGAT Laboratories Ltd, 2018 ABCA 23
("Holm"), the Alberta Court of Appeal was asked
to interpret a written employment contract with a termination
provision that read in part as follows:
2(2) In the event we wish to terminate your
employment without just cause, we agree that we will give you
notice of the termination of your employment, or at our absolute
discretion, we will pay you, in lieu of such notice, a severance
payment equal to the wages only that you would have received during
the applicable notice period.
