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ARTICLE · 15 JULY 2020

Termination Clauses Update: Your "For Cause" Provision Might Now Invalidate Your "Without Cause" Provision

Fogler, Rubinoff LLP
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A recent case from the Ontario Court of Appeal likely invalidates thousands of termination clauses across Ontario.

CanadaEmployment and HR
Andrea Marsland
Andrea Marsland
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A recent case from the Ontario Court of Appeal likely invalidates thousands of termination clauses across Ontario. If you are an employer using template employment agreements, you should have your templates reviewed right away. Your termination clauses may no longer be enforceable.

What's the Case?

In Waksdale v. Swegon North America Inc., 2020 ONCA 391 (CanLII), the Court considered a relatively standard summary judgment motion dealing with allegations of wrongful dismissal. The main issue on the motion was the legal effect of a written employment agreement between the parties. The employee took the position that the termination clause in his employment agreement was void because it attempted to contract out of the minimum standards set out in the Employment Standards Act, 2000, S.O. 2000, c. 41 (the "ESA"). The employer conceded that the "Termination for Cause" provision in the agreement was void because it violated the ESA. However, it argued that

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