Canadian HR Reporter

www.hrreporter.com 15 repeatedly that they're going to look at a number of factors: length of service, the person's age, their position, the nature of their employment and availability of similar jobs. The unofficial maximum is 24 months, so you can be looking at a substantial liability." But the reality might surprise some employers, he says. "If you think that you're limiting them to employment standards only, that could be eight weeks even for a long-term employee, as opposed to 24 months. A lot of employers are in for a really big surprise when they let somebody go and assume that they only owe the person eight weeks or less and, all of a sudden, they find that they owe them months, if not years." Updating contracts Will this ruling invalidate many employment contracts currently in place? It's difficult to know, says Nowakowski, but recent history says this might be true. "Over the last several years, there have been various court decisions that have found without-cause termination provisions to be invalid because they violated the Employment Standards Appeal has… said is that, because the for-cause provision is not valid, it, therefore, breaches the Employment Standards Act." Legal oversight always important The message is clear for employers, especially those that are considering letting an employee go, says Hamzo. "If you have an employee that you were thinking of terminating, it's always good practice — not simply because of this recent court decision — to have a lawyer take a look beforehand to determine whether or not that termination provision is enforceable in light of recent case law, because it has the potential to really lead to more liability on the part of the employer." Despite sometimes explicit wording that exists in employment agreements, common law practice must also be considered, says Rudner. "In common law, if you have just cause to fire someone, then they're not entitled to any notice or termination pay. But if you don't have just cause to terminate someone, then, in common law, everyone's entitled to reasonable notice. The common myth out there is that it's a month per year; our courts have said Act. Employers generally had focused on getting their termination clauses in shape to deal with the without-cause portion," he says. "But now with the risk added of your for-cause provision [being] invalid and it makes everything invalid, it requires a second look at existing templates to see whether they may have much greater liability in a without-cause termination situation than they had anticipated." When deciding to rewrite a contract, there's more to it than just having the employee signing it, says Bregman. "If you have current employees [and] you're concerned that their termination clause provisions may no longer be enforceable, you could use a salary increase or a signing bonus or promotion — some forms of fresh consideration as an opportunity to get them on to new agreements. In Ontario, you can't make continued employment conditional on signing a new employment agreement; there has to be something new that you're offering in exchange for it." There is also another way to future- proof employment agreements, says Rudner. "Use the saving provision, which essentially provides that the employee "This will have tremendous impact on employers because the vast majority of termination clauses are probably now unenforceable." Stuart Rudner, Rudner Law will never get less than their entitlements under the Employment Standards Act, regardless of what the other clauses might say. If you do that properly, then you can protect yourself against any inadvertent breach of the act as it exists when you draft a clause but also against changes [to] the act, [which] may change over time." CHRR The Court of Appeal for Ontario is located in Osgoode Hall in Toronto.

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