Canadian Employment Law Today

Canadian Employment Law Today | 3 Canadian HR Reporter, a Thomson Reuters business 2015 Cases and Trends Timing is everything Differing case law raises debate over validity of termination clauses that may or may not comply with legislation, depending on the timing of the termination BY ANTHONY LUNGU CONTRACTUAL termination clauses al- low employers to limit the amount of notice owing upon termination, and therefore pro- vide protection against potentially costly no- tice claims by departed employees. Yet, while termination clauses allow employers to exer- cise a measure of control over an employee's entitlements upon dismissal, the law is clear that such clauses cannot be used to defeat the statutory minimums mandated under pro- vincial or federal employment standards leg- islation. More simply put, an employer can- not "contract out" of the statutory minimum standards. erefore, if a termination clause provides for something less than the mini- mum standards, that clause will be void and the employee free to seek additional notice at common law. What is perhaps less clear, and subject to continued debate, is whether such clauses must meet the statutory minimum at all times or simply at the time of termination? Although this issue may seem like a dis- crete question of law, it in fact directly engages the purposes served by employ- ment standards legislation more broadly. In Machtinger v. HOJ Industries Ltd., the Supreme Court of Canada stated that the purpose of employment standards legisla- tion is to protect employees, by mitigating the "power imbalance" inherent to the em- ployer-employee relationship. erefore, such legislation ought to be given a broad and liberal interpretation, so as to "extend its protection to as many employees as pos- sible." e Supreme Court's point was that society is ultimately better served when em- ployment standards legislation is broadly applied in employees favour – and strin- gently enforced as against employers – as this accords better "protection" from poli- cies that might otherwise compromise their statutory entitlements. In Shore v. Ladner Downs, the British Co- lumbia Court of Appeal applied Machtinger for the proposition that a termination clause must comply with statutory minimum stan- dards at all times or it will be held void and unenforceable. In that case, the termination clause provided for an amount of notice that actually met the applicable statutory minimum, but would have provided for an amount less than the minimum amount in certain circumstances. Following the prin- ciples set-out in Machtinger, the Court of Appeal held that employees should not be required to "keep an eye on the relationship between the statutory minimum and the contractual term." In other words, it would not be keeping with the purpose of employ- ment standards legislation to put employees in the precarious position of having to deter- mine whether the statutory minimums are being complied with upon dismissal. e reasoning in Shore was subsequently approved by the Ontario Superior Court of Justice in Slepenkova v. Ivanov, which simi- larly dealt with a termination clause that provided for an amount of notice that met COMPLIANCE on page 11 » August 10 - 13, 2015 | Downtown Toronto The Osgoode Certificate in ADVANCED HR LAW FOR EXPERIENCED HR PROFESSIONALS Day 1: Pre-Employment: Job Postings / Interviewing / Drafting Employment Agreements & Policies Day 2: During the Employment Relationship: Policies and Addressing Performance Issues Day 3: Discipline and Dismissal Day 4: The Litigation Process: What to Expect if You Have to Go to Court Priority Service Code: 15-14EL Program Directors: Stuart E. Rudner, Rudner MacDonald LLP Natalie C. MacDonald, Rudner MacDonald LLP Registration Fee: $3,995 plus HST Inquire about group discounts and financial aid. Location: Osgoode Professional Development, 1 Dundas St W, Suite 2600, Toronto In this hands-on, intensive practical program, participants are led through a series of thought-provoking scenarios designed to provide essential insights, strategies and tactics to help reduce your organization's exposure to legal risk. Enrollment is strictly limited. To Register: www.osgoodepd.ca Or Call: 416.597.9724 or 1.888.923.3394 Or E-mail: OsgoodePD@osgoode.yorku.ca

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