Canadian HR Reporter

March 2020 CAN

Canadian HR Reporter is the national journal of human resource management. It features the latest workplace news, HR best practices, employment law commentary and tools and tips for employers to get the most out of their workforce.

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44 www.hrreporter.com S P O N S O R E D entitlement to the statutory minimums. The court stated the saving provision "ensures that any portion of the termination clause that falls short of the ESA must be read up so that it complies with the ESA." Rossman v. Canadian Solar Inc. Although IBM Canada provided clarity to employers on the use of a saving provision, this appeared to be short-lived. Approximately one year after IBM Canada, the Court of Appeal issued the Canadian Solar decision, in which it took a more restrictive approach to the use of a saving provision. Noah Rossman was employed by Canadian Solar for three years when his employment was terminated without cause. He signed two employment agreements during his tenure, both of which contained a termination clause that limited his rights on termination of employment: "(c) by the Employer, after the probation period, in its absolute discretion and for any reason on giving the Employee written notice for a period which is the greater of: (i) 2 weeks, or (ii) In accordance with the provisions of the Employment Standards Act (Ontario) or other applicable legislation, or on paying to the employee the equivalent termination pay in lieu of such period of notice. The payments contemplated in this paragraph include all entitlement to either notice of pay in lieu of notice and severance pay under the Employment Standards Act Ontario. In the will be subject to applicable statutory deductions. In addition, you will be entitled to benefit continuation for the minimum notice period under applicable provincial employment standard legislation. In the event that the applicable provincial employment standard legislation provides you with superior entitlements upon termination of employment ('statutory entitlements') than provided for in this offer of employment, IBM shall provide you with your statutory entitlements in substitution for your rights under this offer of employment." Amberber alleged he was wrongfully dismissed by IBM and claimed entitlement to reasonable notice on a common law standard. He argued the termination clause provided less than his minimum entitlements under the Employment Standards Act, 2000 (ESA) and failed to rebut the presumption he was entitled to notice at common law. The court rejected the first argument and referred to the language of the saving provision. However, the court accepted the second argument and found the termination clause to be ambiguous as it did not clearly rebut the presumption of common law notice. This ambiguity had to be resolved in favour of Amberber who was therefore entitled to reasonable notice at common law. IBM successfully appealed this decision to the Court of Appeal for Ontario, which found the termination clause, interpreted as a whole, was not ambiguous and clearly evidenced an intention of the parties to limit Amberber's It's good practice to include a saving provision in any termination provision to ensure a terminated employee receives no less than the minimum standards under prevailing employment standards, say Priya Sarin and Matthew Badrov of Sherrard Kuzz CAN A DEFICIENT TERMINATION PROVISION EVER BE 'SAVED'? IBM appealed the decision to the Court of Appeal, which found the termination clause clearly evidenced an intention to limit entitlement to statutory minimums. A properly drafted termination clause in an employment agreement is an effective way to limit an employee's entitlement on termination of employment. However, courts will carefully scrutinize a termination clause and if it is found to be ambiguous or otherwise unenforceable, the employee will be entitled to reasonable notice at common law. Frequently, a termination clause will be declared unenforceable because it provides the employee with less than the minimum entitlements owed (or potentially owed) under employment standards legislation. In order to protect against this possibility, many employment agreements will include a "saving" provision stating that, despite the language of the termination clause, the employer will comply with all minimum statutory obligations. Although a saving provision can offer some protection, not all saving provisions are created equally. The Court of Appeal for Ontario recently issued two decisions in which the court demonstrated it will critically examine the language of the saving provision itself to ensure it meets the test of enforceability. Amberber v. IBM Canada Ltd. Noah Amberber was employed by IBM Canada for just over a year when his employment was terminated without cause. The termination clause in Amberber's employment agreement stated: "If you are terminated by IBM other than for cause, IBM will provide you with notice or a separation payment in lieu of notice of termination equal to the greater of (a) one (1) month of your current annual base salary or (b) one week of your current annual base salary, for each completed six months worked from your IBM service reference date to a maximum of twelve (12) months of your annual base salary. This payment includes any and all termination notice pay, and severance payments you may be entitled to under provincial employment standards legislation and Common Law. Any separation payment Matthew Badrov Lawyer at Sherrard Kuzz Priya Sarin Lawyer at Sherrard Kuzz E M P L O Y M E N T L AW

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