Canadian HR Reporter

26 www.hrreporter.com S P O N S O R E D intellectual property; or, in any manner that is illegal or contrary to the company's policy or business interests x. making any comments, directly or indirectly, either orally or in writing, on the internet or otherwise... of a negative, disparaging, defamatory or slanderous nature about the company, its employees, officers, directors or associated companies or your relationship with the company xi. fundamental breach of your duties as set out in this agreement or in any schedules to this agreement xii. material inaccuracies on your resumé, job application or information provided by you in the interview process with the company xiii. documented warnings with respect to the performance of your duties that the company considers to be unsatisfactory xiv. any matter recognized by the courts to justify termination for cause. If the company terminates your employment pursuant to this section, you shall be entitled to receive your then current unpaid base salary set out above accrued to the date of termination and the company shall not be required to pay any anticipated remuneration, and all benefits shall be discontinued as of the date of termination." Nine months after starting work, Waksdale's employment relationship was terminated without cause. He was provided with two weeks' pay in lieu of notice. Waksdale was not happy with this turn of events. He commenced a lawsuit claiming: wrongful dismissal; that the termination provisions of his employment agreement were unenforceable; and that he was entitled to reasonable notice at common law (which he claimed was six months). The lower court decision Before the lower court, the parties agreed that the for-cause termination provision was invalid because it did not comply with the ESA (for reasons not explained in the decision). The provision was, therefore, not enforceable. lieu on termination of employment. Specifically, it stated under "Termination for Cause": "It is understood that grounds for immediate termination without notice includes: i. solicitation of the company's customers... ii. use of information, such as the company's customer list... for personal gain or profit iii. disclosing any of the company's confidential information to any unauthorized person, enterprise or entity, without first obtaining the written authorization from the company... iv. commission of a criminal offence punishable by law under the Criminal Code of Canada or any other provincial or federal statute: (a) of such serious and substantial nature, as determined by the company acting reasonably, which would materially injure and/or impede the reputation of the company if you were retained as an employee; or (b) involving an act of dishonesty relating to the company such as embezzlement, theft or fraud v. failure to immediately inform management of receipt of gifts or favours valued at greater than $100 annually vi. violation of any applicable human rights legislation or non-discrimination policy that the company may establish at any time in the future vii. any action or conduct that would constitute harassment or violence at the workplace; viii. engaging in any activity which likely competes with the company, compromises the position of the company or causes a conflict of interest by preventing you from fully and objectively performing your duties and obligations... in a particular situation or a perceived conflict of interest ix. communicating, electronically or otherwise, in a manner that is: discriminatory or harassing; derogatory or demeaning to any individual or group; obscene, sexually explicit or pornographic; defamatory or threatening; in violation of any licence governing the use of software or other A recent decision in Ontario serves as a strong reminder to employers to review their employment agreements regularly to ensure that they are compliant with the current — and fluctuating — state of employment law in Canada, say Priya Sarin and Matthew Badrov of Sherrard Kuzz INVALID 'FOR-CAUSE' LANGUAGE VOIDS TERMINATION PROVISION the recent decision Waksdale v. Swegon North America Inc., the Court of Appeal for Ontario held that an employer could not rely on a valid and enforceable "without-cause" termination provision in an employment agreement, because it also included a "for-cause" termination provision that did not comply with Ontario's Employment Standards Act, 2000 (ESA). In a surprising departure from earlier case law, the court declined to sever the invalid "for-cause" termination provision from the agreement, despite the existence of a valid severability clause. Instead, the court held that the two termination provisions must be read together such that, if one was invalid, they both were. The court was not persuaded by the employer's argument that the employment relationship was terminated without cause — that is, the employer never sought to rely on the invalid for- cause termination provision in the first place. This decision continues the court's trend of taking a very restrictive approach to interpreting termination provisions in an employment agreement, where they limit an employee's entitlements on termination. What happened? Benjamin Waksdale was employed with Swegon North America in a director of sales position, with an annual income of $200,000. Prior to starting with Swegon, Waksdale signed an employment agreement that contained a: • without-cause termination provision, limiting Waksdale to minimum ESA entitlements if terminated without cause • for-cause termination provision, confirming that Waksdale was not entitled to notice or pay in lieu if terminated for cause • severability provision, allowing any illegal, invalid or unenforceable provision in the agreement to be severed and the remaining provisions to remain in effect. The for-cause termination clause expressly outlined conduct that would amount to cause and disentitled Waksdale from any notice or pay in Matthew Badrov Lawyer at Sherrard Kuzz Priya Sarin Lawyer at Sherrard Kuzz E M P L O Y M E N T L AW IN

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