In Nogueira v Second Cup ( 2017 ONSC 6315) Justice Morgan was faced with determining the validity of this termination clause :
If the Second Cup terminates your employment, it will comply with its obligations under the employment standards legislation in the province in which you work (the ‘Employment Standards Act’).
The judge held that this clause did not oust the common law term of reasonable notice. This is what he said on that issue :
10] It is evident that the clause in Machtinger is considerably more explanatory than that in the case at bar. In Machtinger, the employer went out of its way to advise the employee of what he would get (or, more accurately, what he would not get) upon termination. Likewise, in Roden v. Toronto Humane Society, 2005 CanLII 33578 (ON CA), 2005 CanLII 33578, the Court of Appeal found a termination clause displaced the common law where it provided that the employee would receive “the minimum amount of advance notice or payment in lieu thereof as required by the applicable employment standards legislation”. Along similar lines, in Farah v. EODC Inc., 2017 ONSC 3948 (CanLII), the contract provided that, “Upon termination, the Applicant would only be entitled to the statutory entitlements prescribed under the Employment Standards Act” [emphasis added].
 No such explanation or warning sign appears in clause 13 of the Employment Agreement here. Using the barest possible language, it says nothing more than that the employer will obey the statute. The new employee being asked to sign this contract could be forgiven for assuming that the clause is there to reassure her that none of her rights are being curtailed, when in fact the very opposite is true.
 It is evident that the Defendant, as employer, is responsible for drafting the Employment Agreement. It is addressed to the Plaintiff in the form of a letter agreement and refers to the employee as “you”. To the extent that an ambiguity exists in interpretation, the Employment Agreement should be interpreted contra proferentem against the employer as drafter. As Stinson J. stated in Singh v. Qualified Metal Fabricators Ltd.  OJ No 4219, at para. 15, “I am not prepared to find that the Employment Agreement operated to nullify or detract from the implied common law requirement of reasonable notice of termination”…especially “having regard to the power imbalance that exists between an employer and employee as a matter of course.”
 In my view, the words of the Employment Agreement are ambiguous at best. They do not convey the meaning that the Defendant attaches to them, and I do not see them as curtailing in any way the common law principal of reasonable notice or pay in lieu thereof.
There now seems to be at least three basic attacks on ESA contracts that the Ontario Court of Appeal has endorsed.
- Failure of consideration. ( Hobbs v TDI Canada Ltd , 2014 ONCA 44783)
- Finding of an ambiguity in the wording. ( Wood v Fred Deeley Imports Ltd ( 2017 ONCA 158)
- Finding that any part of the termination clause is contrary to the ESA and thus the whole provision is held to be invalid even if there is a severability clause. ( North v Metaswitch Networks Corp, 2017 ONCA 790)
What future grounds for attack exist in the future?
If and when it happens you will read about it first on this blog.