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ARTICLE · 25 JANUARY 2019

Risk In Use Of An ESA Termination Clause?

Blaney McMurtry LLP
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It is relatively common for Canadian employers to use an "ESA termination clause" in their employment agreements.

CanadaEmployment and HR
D. Barry Prentice
D. Barry Prentice
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It is relatively common for Canadian employers to use an “ESA termination clause” in their employment agreements. This type of clause limits the employee’s entitlement on termination to the statutory minimums in the provincial employment standards legislation. However, a recent case out of British Columbia, Bailey v. Service Corporation International, highlights a potentially unforeseen risk associated with the use of ESA termination clauses.

FACT SITUATION

Donald Bailey was a 17+ year employee. During his employment he executed a series of written employment agreements, each of which contained an ESA termination clause restricting his entitlement on termination without cause to the statutory minimums in the British Columbia employment standards legislation.

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