When Intention Matters: Assessing The Enforceability Of Termination Clauses

An invalid termination clause is a former employee's golden ticket for employment litigation, increasing a notice period from the statutory minimum to what is reasonable at common law. The monetary difference can be substantial. Given the financial implications, there is a large and growing body of case law on when a termination clause will be deemed unenforceable.

The recent Ontario Superior Court of Justice decision of Burton v Aronovitch McCauley Rollo LLP adds clarity to this jurisprudence and provides the additional requirement of assessing employer intention.

The case concerned Burton, a law clerk who was terminated without cause in 2015, after 12 years of employment with the defendant law firm. She commenced litigation shortly thereafter alleging that the termination clause in her employment contract was invalid as it failed to comply with the minimum requirements as set out in the Employment Standards Act.