Termination Provisions And Employment Contracts: The New Order

Article by Martin Smith & Cassandra Khatchikian (Student-At-Work)

Introduction

Some employers do not see the value in executing employment contracts. However, without termination clauses which limit an employee's entitlements upon termination without cause, damages awarded can be significant. Long gone is the traditional common law "rule of thumb" of one month's notice per year of service.¹ The notice period can be dramatically extended by the court when weighing various factors.

Many employers choose to include termination clauses in their employment contracts for non-unionized employees. Termination clauses vary but generally, they include provisions for reserving the right to provide pay in lieu of notice of termination to an employee.