Adding Words to the ESA Wilful Misconduct Clause Makes Whole Clause Void:

In De Castro v Arista Homes Ltd ( 2024 ONSC 1035 ) Justice Koehnen had to determine the enforceability  of the following termination clause

:If you are terminated for Cause or you have been guilty of wilful misconduct, disobedience, breach of Employment Agreement or wilful neglect of duty that is not trivial and has not been condoned by ARISTA, then ARISTA will be under no further obligation to provide you with pay in lieu of reasonable notice or severance pay whether under statute or common law. For the purposes of this Agreement “Cause” shall include your involvement in any act or omission which would in law permit ARISTA to, without notice or payment in lieu of notice, terminate your employment.  (Emphasis added)


The Judge found that this termination clause was not enforceable for the following reasons :

  1. Because it lists both cause or guilty of wilful misconduct etc, this must mean that it included both the ESA definition and the common law concept. This makes it illegal under Waksdale.
  2. Because it also lists ” breach of the Employment Agreement” as a ground for termination without notice, this could include many issues outside the scope of the ESA provision. For instance, if the Employment Agreement set the start time as  8 am and the employee wilfully came in at 8:10, that would never pass the ESA test

On another issue, the employer also tried the old canard that the Plaintiff failed to mitigate their damages . This is what the Judge said:

[28]      Courts have noted that if employers want to argue that a former employee has failed to mitigate her damages, the employer will be well advised to present evidence of help that it offered to the employee during his or her job search.

[12]  Here there is no evidence that the defendant offered the plaintiff any help in a job search.    It provided no job counselling.  It provided no leads for any jobs.  It did not provide the plaintiff with a reference letter


My Comments :

To misquote an old Motown song ” Don’t Mess With the ESA ”

If you want to be ESA compliant  just copy the words of the Act, don’t get creative.

If you are going to critisize  someone for a poor job search then either help them or shut up.

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